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Price Elasticity of Demand Quiz

Created by

@ConvincingJasper8862

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Questions and Answers

What type of goods are likely to have relatively inelastic demand?

Seasonal goods

Luxury goods

Necessary goods (correct)

Generic goods

What does it mean when demand is said to be inelastic?

The quantity demanded responds to a lesser extent than the given change in price (correct)

The percentage change in demand is greater than the percentage change in price

The percentage change in demand is less than the percentage change in price

The quantity demanded responds strongly to the given change in price

What is the value of elasticity of demand for relatively inelastic demand?

Variable and unpredictable

Less than one (correct)

Equal to one

Greater than one

When is demand said to be elastic?

<p>When the percentage change in demand is greater than the percentage change in price</p> Signup and view all the answers

What does it mean when the price elasticity of demand is zero?

<p>There is no change in demand with any change in price</p> Signup and view all the answers

Study Notes

Elasticity of Demand

Goods with relatively inelastic demand tend to be essential items, such as medicines, or habit-forming products like tobacco and addictive substances.
Inelastic demand means that changes in price have a relatively small effect on the quantity demanded.
For relatively inelastic demand, the elasticity of demand value is less than 1, indicating that a 1% change in price will result in a less than 1% change in quantity demanded.
Demand is said to be elastic when changes in price have a relatively large effect on the quantity demanded.
When the price elasticity of demand is zero, it means that the quantity demanded does not respond at all to changes in price.

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Description

Test your knowledge of price elasticity of demand with this quiz. Explore concepts such as elastic and inelastic demand, the effects of price changes on quantity demanded, and the different types of price elasticity.