5 Questions
What does elasticity of demand measure?
Responsiveness of quantity demanded to price changes
What does the Law of Demand state?
As the price of a good increases, the quantity demanded decreases
What is the difference between movement along the demand curve and shift of the demand curve?
Movement along the curve is caused by changes in price, while shift is caused by changes in other factors
What is the importance of demand forecasting in business?
To make informed production and inventory management decisions
What does income elasticity of demand measure?
The responsiveness of quantity demanded to changes in income
Test your understanding of the theory of demand and supply with this quiz on Chapter 2, Unit 1. Assess your knowledge of the law of demand, elasticity of demand, determinants of demand, and the difference between movement along the demand curve and shift of the demand curve. Sharpen your skills in defining and measuring elasticity and applying these concepts.
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