Price Elasticity of Demand

Fill in the blank: A demand curve is considered inelastic if the quantity demanded changes _______ with a change in price.

• significantly

• insignificantly

• not at all

• randomly

Which of the following describes unitary price elasticity?

• A) Change in demand is more than the change in price

• B) Change in demand is less than the change in price

• C) Change in demand equals the change in price.

Fill in the blank: If the change in demand is equal to the change in price, the demand is ______.

• A) Price elastic

• B) Price inelastic

• C) Unitary price elasticity

Which type of demand is characterized by a change in demand that is less than the change in price?

• Price elastic

• Price inelastic

• Unitary price elasticity

What does perfectly elastic demand mean?

• Demand where an increase in price will result in zero demand

• Demand where a decrease in price will result in zero demand

• Demand where price changes have no effect on demand

• Demand where demand is always zero.

In perfectly elastic demand, what is the value of PED?

• 0

• 1

• ∞

• -1

Perfectly elastic demand is a situation where an increase in price will result in ______ demand.

• increased

• decreased

• zero

• constant

What is the definition of perfectly inelastic demand?

• Demand where a change in price will result in no change in quantity demanded.

• Demand where a change in price will result in a change in quantity demanded.

• Demand where a change in quantity demanded will result in no change in price.

• Demand where a change in quantity demanded will result in a change in price.

If a product is price elastic, what should a supplier do to increase revenue?

• Increase the price

• Decrease the price

• Keep the price constant

• Increase the price slightly.

Who is interested in the price elasticity of demand?

• Consumers

• Suppliers

• Government

• All of the above.