18. An elastic demand is when the percentage change in quantity demanded istherefore, the business should the price level to increase total revenuethan the percentage change in the price level;smaller ; raisegreater : lowerO greater; raisecannot be determined based on information providedsmaller : lower

"Price elasticity of demand is said to be elastic if a small change in price level of a commodity…

18. An elastic demand is when the percentage change in quantity demanded is than the percentage change in the price level; therefore, the business should the price level to increase total revenue smaller: raise greater: lower Ogreater: raise cannot be determined based on information provided smaller : lower

18. An elastic demand is when the percentage change in quantity demanded is than the percentage change in the price level; therefore, the business should the price level to increase total revenue smaller: raise greater: lower Ogreater: raise cannot be determined based on information provided smaller : lower

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 8SCQ: The avenge annual income rises from 25,000 to 33,000, and the quantity of bleed consumed in a year...

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Similar questions

Why is the supply curve with constant unitary elasticity a straight line?
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
Why is the demand curve with constant unitary elasticity concave?
Describe the general appearance of a demand or a supply curve with infinite elasticity.
The avenge annual income rises from 25,000 to 33,000, and the quantity of bleed consumed in a year by the avenge person falls from 30 loaves to 22 loaves. What is the income elasticity of bread consumption? Is bread a normal or an inferior good?
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Over time, technological advance increases consumers incomes and reduces the price of smartphones. Each of these forces increases the amount consumers spend on smartphones if the income elasticity of demand is greater tha____________ and if the price elasticity of demand is greater than_____________. a. zero, zero b. zero, one c. one. zero d. one, one
The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same?
Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.
What is the formula for line cross-price elasticity of demand?
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decayfigh ter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopde cays sales declined by 1,500 units per month. What is the arc cross elasticity of demand between Stopdecays toothbrush and Decayfighters toothbrush? What does this indicate about the relationship between the two products? If Stopdecay knows that the arc price elasticity of demand for its toothbrush is 1.5, what price would Stopdecay have to charge to sell the same number of units as it did before the Decayfighter price cut? Assume that Decayfighter holds the price of its toothbrush constant at $30. What is Stopdecays average monthly total revenue from the sale of electric toothbrushes before and after the price change determined in part (b)? Is the result in part (c) necessarily desirable? What other factors would have to be taken into consideration?