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The price elasticity of demand coefficient measures
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Buyer responsiveness to price changes.
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The basic formula for the price elasticity of demand coefficient is:
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Percentage change in quantity demanded/percentage change in price.
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If the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80 will:
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Increase the quantity demanded by about 25 percent.
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Which of the following is not characteristic of the demand for a commodity that is elastic?
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The elasticity coefficient is less than one.
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If the demand for product x is inelastic, a 4 percent increase in the price of x will:
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Decrease the quantity of x demanded by less than 4 percent
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A perfectly inelastic demand schedule:
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Can be represented by a line parallel to the vertical axis.
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The price elasticity of demand of a straight-line demand curve is:
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Elastic in high-price ranges and inelastic on low-price ranges.
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A leftward shift in the supply curve of product x will increase equilibrium price to a greater extent the:
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More inelastic the demand for the product.
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The price elasticity of demand is:
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Negative, but the minus sign is ignored.
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The price elasticity of demand for beef is about 0.60. other things
equal, this means that a 20 percent increase in the price of beef will
cause the quantity of beef demanded to:
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Decrease by approximately 12 percent.
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If a demand for a product is elastic, the value of the price elasticity coefficient is:
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Greater than one.
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If the price of hand calculators falls from $10 to $9 and, as a result, the quantity demanded increases from 100 to 125, then:
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Demand is elastic.
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If the price elasticity of demand for gasoline is 0.20:
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A 10 percent rise in the price of gasoline will decrease the amount purchased by 2 percent.
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Moving upward on a downward-sloping straight-line demand curve, we find that price elasticity:
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Increases continuously.
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In which price range of the accompanying demand schedule is demand elastic?
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$4-$3
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