Calculating Revenue and Elasticity
9 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What does the Price Elasticity of Demand measure?

  • Responsiveness of sales to change in price (correct)
  • Responsiveness of one commodity to change in the price of another commodity
  • Responsiveness of sales to change in advertising expenditure
  • Responsiveness of sales to change in consumer income

If the quantity demanded before a price change is 2000 and after the price change is 2500, what is the percentage change in quantity demanded?

  • 20%
  • 25%
  • 10%
  • 15% (correct)

When computing Price Elasticity of Demand, what would a negative elasticity value indicate?

  • Inelastic demand (correct)
  • Unitary elastic demand
  • Elastic demand
  • Perfectly elastic demand

What does Cross Elasticity of Demand measure?

<p>Responsiveness of one commodity to change in the price of another commodity (C)</p> Signup and view all the answers

Using the Total Revenue Test, when is demand considered elastic?

<p>When total revenue decreases as price decreases (C)</p> Signup and view all the answers

If the quantity demanded falls by 10% when price increases by 5%, what is the Price Elasticity of Demand?

<p>-2 (D)</p> Signup and view all the answers

What happens to Total Revenue if demand is inelastic and price decreases?

<p>Total Revenue increases (C)</p> Signup and view all the answers

How does an increase in consumer income affect the demand for normal goods?

<p>Increases demand for normal goods (B)</p> Signup and view all the answers

'If two goods are complements, what happens to the cross price elasticity between them?'

<p>'It becomes negative' (B)</p> Signup and view all the answers

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser