AQA Economics AS Microeconomics Price Elasticity of Demand

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11 Questions

Which type of goods have a Cross-Price Elasticity of Demand (XED) equal to zero?

What happens to the Quantity Demanded (QD) of good Y if the price of a weak complement good X falls significantly?

Why are firms interested in understanding Cross-Price Elasticity of Demand (XED)?

Which situation describes close substitutes?

In the context of substitutes, what does an upward-sloping demand curve indicate?

What is the price elasticity of demand (PED) for a price elastic good?

In the context of luxury goods, what does a YED greater than 1 indicate?

What does a price inelastic good signify?

When two goods are complements, what does a negative cross elasticity of demand (XED) indicate?

What is the significance of a YED less than 1 for a normal good?

For close complements, what happens when the price of one good decreases?

Description

Learn about price elasticity of demand in microeconomics with this quiz focusing on the responsiveness of demand to a change in price. Explore the formula and characteristics of price elastic goods.

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