HW Ch 6-1

# HW Ch 6-1 - jSmclt-nt iDntc 10.513509 gTimo 12:21 PM 1...

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Unformatted text preview: jSmclt-nt: iDntc: 10.513509 gTimo: 12:21 PM 1. Instructor: koltiioom alkoﬁahi Assignmglitjﬁx: (3116-1 Come: Eco 2301-05 Book: Hubbardl'O'Brien: Microeconomics - 22 ..._._.__.._____________ ~~~~~~~~ W..__i Price elasticity of demand measures 3"? how responsive suppliers are to price changes. how responsive sales are to changes in the price ofa related good. how responsive sales are to a change in buyeis' incomes. how responsive quantity demanded is to a change in price. Suppose the vaiue of the price elasticity of demand is - 3. What does this mean? ‘,)_ VE- A l percent increase in the price of the good causes quantity demanded to increase by 3 percent. A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent. A \$l increase in price caused quantity demanded to fail by 3 units. A 3 percent increase in the price of the good causes quantity demanded to decrease by I percent. If the percentage change in price is 20 percent and the value of the price elasticity of demand is - 5, then quantity demanded will increase by 100 percent. S will decrease by 100 percent. will increase by 5 percent. impossible to determine without additional information. The price elasticity of demand for Stork ice - cream is - 4. Suppose you're told that following a price increase, quantity demanded fell by IO percent. What was the percentage change in price that brought this about? 0.4 percent. V 2.5 percent. 40 percent. 25 percent. Page 1 ...
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