What is the price elasticity of demand (PED) for a product for which a 10% price rise reduces sales volume by 5%?
Which of the following is a use of price elasticity of demand?
To calculate consumer spending based on their disposable income
To identify changes in the spending patterns of consumers
To calculate changes in the general price level
To estimate the changes in a firm's costs of production
A price cut from $2 to $1.50 causes the demand for peas to rise from 10.000 units to 11.500 units. What is the price elasticity of demand for peas?
Demand for a product is likely to be price inelastic the ....
fewer substitutes is thas
fewer complements it has
higher its market price
greater the proportion of income spent on it
why is knowledge of price elasticity of demand useful?
To monitor the rate of price inflation
to calculate changes in disposable incomes
to estimate the effects of changes in production costs
to forecast the impact on revenues of different pricing strategies
A product has totally inelastic price elasticity of demand. What will happen to total revenue if the price of the product rises by 10%?
it will fall by 10%
it will fall to zero
it will remain unchanged
it will rise by 10%
A football club raises all stadium seat prices by 5%. The stadium is divided into four zones. The demand for seats falls by 1% in zone W, by 3% in zone X, by 5% in zone Y and by 6% in zone Z.
In which zone is the responsiveness of demand for seats to the price change elastic?
The table shows four people’s demand for t-shirts at two prices. Who has the most elastic demand for t-shirts when the price rises from $10 to $15?
A product has a price elasticity of demand that is greater than one.
What will happen to total revenue if the price of the product is reduced by 3%?
It will fall by more than 3%.
It will fall to zero
It will be unchanged
It will rise
The table illustrates the demand and supply for coffee in a market in Africa. When the price rises from $20 to $30 per kg, what is the price elasticity of supply for coffee?