elasticity

The elasticity of demand for tissues is 0.66. This means the demand for tissues is

• elastic
• unit elastic
• inelastic
• really expensive

A good with a vertical demand curve has a price elasticity of demand that ________ .

• is equal to 1

• is equal to infinite

• is equal to zero

• varies between 0 and 1

Which of the following describes the relative elasticity in demand for toothpaste?

• Demand is inelastic because it is a luxury item

• Demand is elastic because there are no substitutes

• Demand is inelastic because it makes up a large share of most people’s budget

• Demand is inelastic because it is a low-cost necessity

Which of the following two goods is more likely to be inelastically demanded?

• Demand for insulin

• Demand for vitamins

Which of the following two goods is more likely to be inelastically demanded?

• Demand for tangerines

• Demand for fruit

How does elasticity affect potential revenue for a firm?

• If demand for a good is inelastic, lowering the price could raise revenue.

• If demand for a good is inelastic, raising the price could reduce revenue.

• If demand for a good is elastic, raising the price must increase revenue.

• If demand for a good is elastic, raising the price could reduce revenue.

Which of the following is an example of inelastic demand?

• Jason wants the most expensive cellphone. He decides to get a cheaper model.

• Priya wants to go to the season-opening game. Tickets to another game cost less, but she still buys tickets for the opener.

• Tianna wants to try out a new, expensive restaurant. She goes to another restaurant whose food is excellent and costs less.

• Shawn wants to buy a house in one neighborhood. But after searching, he decides to buy a house elsewhere instead.

INELASTIC demand example:

• bread

• electricity bills

• make up

INELASTIC demand

• demand reacts a lot to price changes

• change in price leads to equal change in demand

• demand doesn't react a lot to price changes

Select a Unitary Elastic product

• bread

• electricity bill

• make up