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Questions and Answers
What happens to price when there is a shortage of a product?
What happens to price when there is a shortage of a product?
- It remains the same
- It fluctuates
- It increases (correct)
- It decreases
What effect does an increase in consumer income have on demand?
What effect does an increase in consumer income have on demand?
- It increases demand (correct)
- It has no effect on demand
- It decreases demand
- It fluctuates demand
What happens to equilibrium price and quantity when demand increases?
What happens to equilibrium price and quantity when demand increases?
- Price and quantity both decrease
- Price and quantity both increase (correct)
- Price increases and quantity decreases
- Price decreases and quantity increases
What does a high price elasticity of demand indicate?
What does a high price elasticity of demand indicate?
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How is price elasticity of demand calculated?
How is price elasticity of demand calculated?
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What does a price elasticity of demand of 0.5 indicate?
What does a price elasticity of demand of 0.5 indicate?
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