Elasticity of Demand

Identify types of price elasticity of demand

• Elastic

• Inelastic

• Unitary Elastic

• Perfect Elastic

Identify types of price elasticity of demand

• Elastic

• Inelastic

• Unitary Elastic

• Perfect Elastic

Identify types of price elasticity of demand

• Elastic

• Inelastic

• Unitary Elastic

• Perfect Elastic

Identify types of price elasticity of demand

• Elastic

• Inelastic

• Unitary Elastic

• Perfect Elastic

Identify degrees of price elasticity of demand

• Ed = 1

• 0 < Ed < 1

• Ed = ∞

• Ed = 0

Identify degrees of price elasticity of demand

• Ed = 0

• 1 < Ed < ∞

• Ed = 1

• 0 < Ed < 1

The price elasticity of demand is a measure of the:

• Steepness or slope of a demand curve

• Absolute changes in quantity demanded and price

• Responsiveness of quantity demanded to a change in price

• Sensitivity of the quantity demanded for one good to a change in the price of another good

If the price elasticity of demand for a good is .75, the demand for the good can be described as:

• Normal

• Elastic

• Inferior

• Inelastic

The larger the coefficient of price elasticity of demand for a product, the:

• larger the resulting price change for an increase in supply.

• more rapid the rate at which the marginal utility of that product diminishes.

• less competitive will be the industry supplying that product.

• smaller the resulting price change for an increase in supply.

The price elasticity of demand is generally:

• negative, but the minus sign is ignored.

• positive, but the plus sign is ignored.

• positive for normal goods and negative for inferior goods.

• positive because price and quantity demanded are inversely related.