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Terms in this set (33)a. Demand is inelastic: [(300 - 350)/325]/[(20-10)/15] =-0.15/0.67= -0.22. Because elasticity is less than 1 in absolute value, demand is inelastic. Because demand is inelastic, total revenue will increase after a price increase. Total revenue increases from ($10 × 350 = $3,500) to ($20 × 300 = $6,000). Recommended textbook solutions
 What is price elasticity of demand if a 2% increase in price results in a 6 decrease in quantity demanded?Suppose that a 2% increase in price results in a 6% decrease in quantity demanded. Own-price elasticity of demand is equal to: a) 1/3.
What does it mean if price elasticity is 2?The price elasticity gives the percentage change in quantity demanded when there is a one percent increase in price, holding everything else constant. If the elasticity is −2, that means a one percent price rise leads to a two percent decline in quantity demanded.
What is the price elasticity of demand if a 2 percent change in price leads to 4 percent change in quantity demanded of a good?Answer and Explanation: If a 2% price rise results in a 4% decrease in quantity demanded, then (c) demand is elastic, and its total revenue decreases. When a product experiences a drastic change in the demand with a minimal price change, the demand for the product is said to be elastic.
When price of a commodity rises by 20% and quantity supplied increases by 30% What is price elasticity of supply?Elasticity of supply = 1.5.
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A if price elasticity of supply is 2.2 and price increases by 2 percent quantity supplied will
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