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Questions and Answers
Which concept measures the extent to which changes in the price of a good or service will affect the quantity demanded by consumers?
Which concept measures the extent to which changes in the price of a good or service will affect the quantity demanded by consumers?
- Elasticity of demand (correct)
- Elasticity of supply
- Demand elasticity
- Price elasticity
When the price of a good or service remains stable but the demand and quantity increase, what does it indicate?
When the price of a good or service remains stable but the demand and quantity increase, what does it indicate?
- Elasticity of demand is negative
- Elasticity of demand is positive (correct)
- Elasticity of supply is negative
- Elasticity of supply is positive
What happens in a situation of positive price elasticity of demand?
What happens in a situation of positive price elasticity of demand?
- Small price changes cause significant changes in quantity demanded (correct)
- Price changes only affect quantity demanded in certain situations
- Price changes have no effect on quantity demanded
- Quantity demanded remains constant regardless of price changes
How can positive price elasticity of demand benefit producers?
How can positive price elasticity of demand benefit producers?
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What should producers consider in order to avoid losing market share in a situation of positive price elasticity of demand?
What should producers consider in order to avoid losing market share in a situation of positive price elasticity of demand?
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