Chapter 5: Elasticity
In this question, assume that all variables other than price and quantity are held constant. At Betty's Burgers, the hamburgers have a price elasticity of demand = 4.05, and Betty increases her quantity sold by 35.00%.
Betty must have decreased the price of her burgers. Betty must have changed her price by (round your answer to one decimal) 8.6% Due to the price change, Betty's total revenue will increase. Patty's Putts increased the price of a round of miniature golf by 36%. Patty has calculated her price elasticity of demand at 0.57. She can expect the number of golfers to decrease. Patty can expect the number of golfers to change by (round your answer to one decimal) 20.5% Patty can expect her total revenue to increase.
Which statement is the best definition of the price elasticity of demand? The ratio of the percent change in quantity demanded to the percent change in price. The ratio of the percent change in demand to the percent change in income. The absolute value of the slope of the demand curve. The ratio of the percent change in price to the percent change in quantity demanded.
The ratio of the percent change in quantity demanded to the percent change in price.
Each scenario below gives some information about price elasticity of demand for a firm. Use this information to answer the questions. Round answers to two places after the decimal where applicable. Honest Abe's Used Cars estimates the price elasticity of demand for their cars to be 2.60. Last month, Abe tried a new marketing scheme which decreased the number of cars sold by 67%. Abe must have __________ prices. Abe's prices must have changed by __________ % Therefore, Abe's total revenue __________ At Webs-R-Us, a website design company, the new manager has decided to increase the price of Webs-R-Us services by 75%. If Webs-R-Us has a price elasticity of demand at 0.50, we can expected the number of websites designed to __________ The number of websites will change by ___________ % Therefore, Webs-R-Us's total revenue will _____________
increased 25.77% decreased decrease 37.5% increase