Ch.4 Sec.3 Assessment
Elastic demand formula
1) $4-$3/$4 x 100=25 2) 10-20/10 x 100=100 3) 100%/25%=4.0 If demand is greater than 1, the demand is elastic
Inelastic demand formula
1) $6-$2/$6 x 100=67 2) 10-15/10 x 100=50 3) 50%/67%= 0.75 If demand is less than 1,the demand in inelastic
Why is demand for home heating fuel inelastic in cold wether
Because everyone wants to stay warm in the winter, and are willing to pay any price to keep warm
Explain elasticity of demand in your own words
Elasticity of demand is how consumers react to the change in an items price and what the measure is
How do we calculate total revenue?
Total revenue is calculated by multiplying the quantity of goods sold by the price of the goods
Name a good with elastic demand at it current price
gas, fruit and vegetables, and cereal