Price Elasticity

The demand for petrol is likely to become more price elastic

• If electric cars become more expensive

• As electric cars become cheaper

• As consumers become more aware of climate threats

• If public transport becomes more reliable

Price elasticity of supply is the responsiveness of

• demand to a change in price.

• price to a change in supply.

• quantity supplied to a change in price.

• price to a change in supply.

Products like pencils, books, and other school stationaries are easy to store in a warehouse. If a firm producing such goods and has a good warehousing facilities and can supply more when prices are rising, then supply will be

• Inelastic

• Unitary elasticity

• Elastic

• None of the above

In agriculture farming, it takes time to increase the supply of fruits and vegetables as the harvesting needs time. Hence supply will be less responsive to increase in price,nad supply will be ...

• Inelastic

• Elastic

• Unitary Elasticity

• None of the above

Demand is said to be price elastic when ______________ and price inelastic when ______________.

• PED > 0 / PED < 0

• PED < 0 / PED > 0

•   PED > 1 / PED < 1

• PED < 1 / PED > 1

The PED of a straight-line demand curve with a negative slope  

• is constant throughout the range of the demand curve

• decreases throughout as P falls

• increases throughout as P falls

• at first increases, reaches a maximum, and then begins to decrease

An increase in the price of potatoes from $4.00 to $4.50 results in a fall in quantity purchased from 10,000 kg to 9000 kg. The price elasticity of demand is

• 1.25

• 0.80

• 0.50

• 12.5

Which of the following best describes price elasticity of demand?

• The responsiveness of quantity demanded to a change in price

• The responsiveness of price to a change in demand

• The responsiveness of supply to a change in price

• The responsiveness of demand to a change in supply

If a product has many substitutes, its price elasticity of demand is likely to be:

• Inelastic

• Elastic

• Unitary

• Perfectly inelastic

A product is considered to have unitary elasticity if:

• A change in price leads to a proportional change in quantity demanded

• A change in price leads to no change in quantity demanded

• A change in price leads to a larger change in quantity demanded

• A change in price leads to a smaller change in quantity demanded