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A: Demand= Desire+willingness+ability
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A: Price elasticity measures the responsiveness of quantity demanded with respect to change in price.
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A: "Correct option is A."
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A: Elasticity of demand=(change in quantity/average quantity)/(change in price/average price)
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- What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens lo the measured elasticity? How would you explain that?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.Explain all the reasons why a decrease in a products price would lead to an increase in purchases.
- Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?If a 10 decrease in the price of one product that you buy causes an 8 increase in quantity demanded of that product, will another 10 decrease in the price cause another 3 increase (no more and no less) in quantity demanded?Why is the demand curve with constant unitary elasticity concave?
- 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?What is the difference between the demand and the quantity demanded of a product, say milk? Explain in words and show the difference on a graph with a demand curve for milk.If a 12% rise in the price of grape juice increases the quantity of orange juice demanded by 8%, what is the cross-price elasticity of demand for orange juice with respect to the price of grape juice? Is the demand inelastic or elastic? ion Select one: O a. 0.67 and elastic O b. 0.67 and inelastic O C. 1.50 and elastic O d. 1.50 and inelastic age Next page Australian Institute of Business
- Suppose the cross-price elasticity of demand between goods X and Y is 2. How much would the price of good Y have to change in order to change the consumption of good X by 50 percent? Instruction: If you are entering a negative number, be sure to use a negative sign (-). percenWhat is the cross elasticity of demand for good B with respect to the price of good A when the price of good A changes from $25 to $28? what type of good is it? Price of Good A $25 $28 a. -0.4 compliments O b. 0.4 substitutes O C. 40 substitutes O d. -40 compliments Demand for Good B 42 40Suppose the own price elasticity of demand for good X is −4, its income elasticity is 3, its advertising elasticity is 4, and the cross-price elasticity of demand between it and good Y is 4. Determine how much the consumption of this good will change if:Instructions: Enter your responses as percentages. If you are entering a negative number, be sure to use a (−) sign.a. The price of good X decreases by 4 percent. percentb. The price of good Y increases by 9 percent. percentc. Advertising decreases by 2 percent. percentd. Income increases by 3 percent. percent