Quiz on Elasticity of Demand

What is the primary focus of elasticity of demand?

• Price sensitivity

• Consumer preferences

• Supply constraints

• Market competition

Which of the following best describes elastic demand?

• Demand does not change with price

• Demand changes significantly with price changes

• Demand is constant regardless of price

• Demand decreases as price decreases

What is the formula for calculating price elasticity of demand?

• Quantity demanded / Total revenue

• Total revenue / Quantity demanded

• Percentage change in quantity demanded / Percentage change in price

• Price / Quantity demanded

If the price of a product increases and the quantity demanded decreases significantly, what type of elasticity is this?

• Elastic

• Unitary

• Perfectly inelastic

• Inelastic

What does a price elasticity of demand value greater than 1 indicate?

• Unitary demand

• Elastic demand

• Inelastic demand

• Perfectly inelastic demand

Which of the following factors does NOT affect the elasticity of demand?

• Necessity vs luxury

• Availability of substitutes

• Seasonal trends

• Consumer income

What is the term for a situation where demand remains unchanged despite price changes?

• Elastic demand

• Perfectly elastic demand

• Inelastic demand

• Unitary demand

How does the time period affect elasticity of demand?

• Demand becomes less elastic over time

• Demand becomes more elastic over time

• Elasticity is constant over time

• Time has no effect on elasticity

If a product has many close substitutes, what can be said about its elasticity?

• It is likely to be inelastic

• It is likely to be elastic

• It is perfectly inelastic

• It is unitary elastic

What is the impact of a price increase on a product with inelastic demand?

• Total revenue remains unchanged

• Total revenue fluctuates

• Total revenue increases

• Total revenue decreases