10 Questions
What is the formula for price elasticity of demand, eD?
eD = (Percentage change in quantity demanded) / (Percentage change in price)
What does the law of demand state?
The quantity demanded will change in the opposite direction of a price change
What does the absolute value of the price elasticity measure represent?
The responsiveness of quantity demanded to a price change
How is the responsiveness of quantity demanded to a change in price shown?
By applying the concept of elasticity
What does a negative price elasticity of demand indicate?
A positive percentage change in price implies a negative percentage change in quantity demanded, and vice versa.
What is the maximum price that can be charged for a good or service under price controls?
Price ceiling
What is the minimum price that can be charged for a good or service under price controls?
Price floor
Which historical figure attempted to set maximum prices for all commodities in the late 3rd century AD?
Roman Emperor Diocletian
What is a well-known example of a price ceiling?
Rent control
What is a widely used example of a price floor?
Minimum wage
Test your understanding of the price elasticity of demand with this quiz. Explore how changes in price impact quantity demanded and assess your knowledge of elasticity concepts.
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