Elasticity of Demand and Supply

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.

True

False

True

False

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.

rent

salaries

insurance

raw materials

True

False

More elastic

More inelastic

price

money

time

quantity

elastic

unitary elastic

inelastic

hyperelastic

True

False