Price Elasticity of Supply & Demand

What is the meaning of price elasticity of demand?

• The change in quantity demanded in response to a change in price

• The change in price in response to a change in demand

• The change in quantity supplied in response to a change in price

• The change in quantity demanded in response to a change in income

What is the significance of price elasticity of demand?

• It helps determine the responsiveness of consumers to changes in price

• It helps determine the responsiveness of suppliers to changes in price

• It helps determine the responsiveness of consumers to changes in income

• It helps determine the responsiveness of suppliers to changes in income

What is one factor affecting the price elasticity of demand?

• Degree of necessity

• Availability of substitutes

• Proportion of income

• All of the above

What is one factor affecting the price elasticity of supply?

• Spare capacity

• Production period

• Durability of goods

• All of the above

When the price of a good increases, what happens to its quantity demanded if it is price inelastic?

• It decreases by a smaller percentage

• It decreases by a greater percentage

• It remains the same

• It fluctuates

When the price of a good decreases, what happens to its quantity supplied if it is price inelastic?

• It decreases by a smaller percentage

• It decreases by a greater percentage

• It remains the same

• It fluctuates

When the price of a good increases, what happens to its quantity demanded if it is price elastic?

• It decreases by a greater percentage

• It decreases by a smaller percentage

• It remains the same

• It fluctuates

When the price of a good increases, what happens to its quantity supplied if it is price elastic?

• It increases by a smaller percentage

• It increases by a greater percentage

• It remains the same

• It fluctuates

What is the impact of availability of substitutes on the price elasticity of demand?

• The more substitutes available, the more price elastic the demand

• The less substitutes available, the more price elastic the demand

• Availability of substitutes has no impact on the price elasticity of demand

• Availability of substitutes affects price elasticity of supply, not demand

What is the impact of production period on the price elasticity of supply?

• The shorter the production period, the more price elastic the supply

• The longer the production period, the more price elastic the supply

• The production period has no impact on the price elasticity of supply

• The production period affects price elasticity of demand, not supply