Quiz on Price Elasticity of Demand and Supply

What does PED stand for?

• Price Equilibrium Supply

• Price Equilibrium Demand

• Price Elasticity of Supply

• Price Elasticity of Demand

What does a PED value greater than 1 indicate?

• Unit elastic demand

• Inelastic demand

• Elastic demand

• Perfectly inelastic demand

If the price of a product decreases and the quantity demanded increases, what is this relationship called?

• Constant relationship

• Direct relationship

• No relationship

• Inverse relationship

What happens to demand when the price rises?

• Demand increases

• Demand becomes elastic

• Demand decreases

• Demand remains the same

What is the formula for calculating PED?

• %ΔP / %ΔQd

• (P2-P1) / (Q2-Q1)

• %ΔQd / %ΔP

• (Q2-Q1) / (P2-P1)

What does a PED value of 0 indicate?

• Perfectly inelastic demand

• Perfectly elastic demand

• Elastic demand

• Unit elastic demand

What is an example of inelastic demand?

• Electronics

• Designer clothes

• Bread

• Luxury cars

What does PES stand for?

• Price Equilibrium of Demand

• Price Elasticity of Demand

• Price Equilibrium of Supply

• Price Elasticity of Supply

What does a PES value greater than 1 indicate?

• Inelastic supply

• Elastic supply

• Perfectly inelastic supply

• Unit elastic supply

What happens to supply when the price increases?

• Supply increases

• Supply becomes elastic

• Supply decreases

• Supply remains the same