72. If quantity demanded falls by 25 percent when price rises by 50 percent, demand is said to be:a. elastic.b. inelastic.c. proportional.d. responsive.Answer: BPage 114Reason - If quantity demanded falls by a smaller percentage than the percentage increase in price,demand is said to be inelastic. In this case, the quantity demanded falls by 25% when price rises by 50%,indicating that the demand is relatively unresponsive to price changes, hence inelastic.
73. In 2004, the Wall Street Journal reported that Starbucks was set to raise some of its prices. Thearticle stated that "mass-market grocery brands such as Kraft Foods Inc.'s Folgers and Maxwell Housecoffees tend to be much more price-elastic" than Starbucks' coffees. This information about elasticities istelling us that: