18) If the price elasticity of demand is 0.6, then a 10 percent increase in the price of the good will lead to a in the quantity demanded. A) 0.6 percent decrease C) 6 percent decrease B) 0.6 percent increase D) 6 percent increase 19) For product XYZ, the price elasticity of demand has an absolute value of 3.5. This means that quantity demanded will increase by A) 3.5 percent for cach I percent decrease in price, ceteris paribus. B) 3.5 units for each $1 decrease in price, ceteris paribus. C) I percent for each 3.5 percent decrease in price, ceteris paribus. narihus

18) If the price elasticity of demand is 0.6, then a 10 percent increase in the price of the good will lead to a in the quantity demanded. A) 0.6 percent decrease C) 6 percent decrease B) 0.6 percent increase D) 6 percent increase 19) For product XYZ, the price elasticity of demand has an absolute value of 3.5. This means that quantity demanded will increase by A) 3.5 percent for cach I percent decrease in price, ceteris paribus. B) 3.5 units for each $1 decrease in price, ceteris paribus. C) I percent for each 3.5 percent decrease in price, ceteris paribus. narihus

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...

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Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000) Quantity Demanded (income = 12,000) 8 40 DVDs 50 DVDs 10 32 45 12 24 30 14 16 20 16 8 12 a. Use the midpoint method to calculate your price elasticity of demand as the price of DVDs increases from 8 to 10 if (i) your income is 10,000 and (ii) your income is 12,000. b. Calculate your income elasticity of demand as your income increases from 10,000 to 12,000 if (i) the price is 12 and (ii) the price is 16.
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