5 Questions
What does a price elasticity of -2 indicate?
A one percent price rise leads to a two percent decline in quantity demanded
What does the term 'more elastic' mean in the context of price elasticity?
A good's elasticity has greater magnitude, ignoring the sign
Under what circumstances are price elasticities positive?
For Veblen and Giffen goods
What does the income elasticity of demand measure?
How the quantity demanded changes with consumer income changes
What does the price elasticity of demand measure?
How sensitive the quantity demanded is to its price
Test your understanding of price elasticity of demand with this quiz. Explore how changes in price impact the quantity demanded and learn about the concept of price elasticity.
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