Price Elasticity of Demand Quiz

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9 Questions

If the cross price elasticity of demand (XeD) between two goods is calculated to be 2.5, how would you interpret this?

What does it mean when the income elasticity of demand (IED) for a product is calculated to be -3?

If the cross price elasticity of demand (XeD) is calculated to be 0.1, what type of relationship do the two goods have?

When the elasticity of demand is between 0 and -1.00, how would you describe the demand?

What can be inferred about two goods if the XeD is calculated to be -0.8?

If the IED for a product is found to be 1.5, how should the nature of the product be classified?

When interpreting an elasticity of demand that is infinite, what does this indicate about the demand?

If the XeD between two goods is calculated to be -1.2, how would you classify the relationship between these goods?

What does an IED value of -0.7 indicate about a product?

Description

Test your knowledge on the concept of price elasticity of demand, which measures the responsiveness of demand for a commodity to changes in its price. This quiz includes examples calculating price elasticity based on percentage changes in price and quantity demanded.

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