6 Questions
What happens to price when there is a shortage of a product?
It increases
What effect does an increase in consumer income have on demand?
It increases demand
What happens to equilibrium price and quantity when demand increases?
Price and quantity both increase
What does a high price elasticity of demand indicate?
Consumers are very responsive to price changes
How is price elasticity of demand calculated?
Percentage change in quantity demanded divided by percentage change in price
What does a price elasticity of demand of 0.5 indicate?
Demand is inelastic
Test your understanding of supply and demand with this quiz. Explore the impact of shortages on prices, the relationship between consumer income and demand, and the effects of increased demand on equilibrium price and quantity.
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