Supply and Demand Quiz
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Questions and Answers

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?

  • 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?

  • 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?

    <p>Consumers are very responsive to price changes</p> Signup and view all the answers

    How is price elasticity of demand calculated?

    <p>Percentage change in quantity demanded divided by percentage change in price</p> Signup and view all the answers

    What does a price elasticity of demand of 0.5 indicate?

    <p>Demand is inelastic</p> Signup and view all the answers

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