ECON 2020 CH 6 Elasticity

Linesha, a college student working part-time receives a wage increase. An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs. Based on this information

Blu-ray discs are normal goods and DVDs are inferior goods

If an 8 percent decrease in the price of lobster leads to a 15 percent decrease in the quantity of lobster supplied, then the supply of lobster is

Elastic

If at a price of $24, Octavia sells 36 home-grown orchids and at $30 she sells 24 home-grown orchids, the demand for her orchids is

Elastic

If, for a given percentage increase in price, quantity supplied increases by a proportionately larger percentage, then supply is

Elastic

In 2016, Philadelphia imposes a tax of 1.5 cents per ounce on sweetened beverages, and PepsiCo indicated that its sales in Philadelphia fell by 40 percent after the tax took effect. If the price of PepsiCo's sweetened beverages in Philadelphia increased by 32 percent following the implementation of the tax, then demand for sweetened beverages in Philadelphia would be

Elastic

If at a price of $50, Ghani sells 20 handmade leather cell phone covers but at a price of $60, zero units are sold. Based on this information, the demand for his cell phone covers is

Elastic or perfectly elastic

Economists use the concept of ___________ to measure how one economic variable, such as quantity, responds to a change in another economic variable, such as price

Elasticity

When Nablom's Bakery raised the price of its breads by 10 percent, the quantity demanded fell by 15 percent. What was the effect on sales revenue?

Sales revenue decreased

When Nablom's Bakery raises the price of its bread by 10 percent, the quantity demanded fell by 15 percent. What was the effect on sales revenue?

Sales revenue decreased

If the price elasticity of demand for canned soup is estimated at -1.62. What happens to sales revenue if the price of canned soup rises?

Sales revenue falls

Suppose the absolute value of the price elasticity of demand for meals at Fortune Buffet House is infinity. What happens to sales revenue if the restaurant increases its price by 5 percent?

Sales revenue falls by 100 percent

Suppose at the current price, the demand for copper is estimated at -3.14. What happens to sales revenue if the government imposes a price ceiling slightly below the free market equilibrium price in the copper market?

Sales revenue rises

Supposed the demand for milk is relatively inelastic. What happens to sales revenue if the government imposes a price floor above the free-market equilibrium price in the market for milk?

Sales revenue rises

Refer to Figure 6-4. Which of the following statements about price elasticity of demand is true?

The elastic portion of a straight-line downward sloping demand curve corresponds to the segment above the midpoint.

Refer to Figure 6-5. The section of the demand curve labeled "A" represents

The elastic section of the demand curve

Over longer periods of time, increases in oil prices provide firms with incentives to explore and recover oil. What does this indicate about the long-run price elasticity of supply for oil?

The elasticity coefficient is likely to be higher in the long run than in the short run.

Suppose Pump-U-Up lowers the price of its gym membership by 10 percent, and as a result, Sweat-It-Out experienced a 16 percent decline in its gym membership. What is the value of the cross-price elasticity between the two memberships?

1.6

Suppose when the price of jean-jackets increased by 10 percent, the quantity supplied increased by 16 percent. Based on this information the price elasticity of supply of jean-jackets is A) 0.625. B) 6%. C) 1.6. D) 1.6%.

1.6

If a 5 percent increase in income leads to a 10 percent increase in quantity demanded for airline travel, then airline travel is

A luxury

Which of the following items is likely to have the highest income elasticity of demand?

A luxury cruise to several European countries

If firms do not increase their quantity supplied when price changes, then supply is

Perfectly inelastic

We should never assume that an inelastic demand curve is a perfectly inelastic demand curve because

Perfectly inelastic demand curves are rare

The price elasticity of an upward-sloping supply curve is always

Positive

Inelastic supply occurs whenever the elasticity of supply value is

Positive and < 1

The cross-price elasticity of demand between an unlimited texting option and an unlimited call minutes option offered from a cell phone provider would be

Positive if subscribers consider the services substitutes for each other

Total revenue equals

Price per unit times quantity sold

The price elasticity of supply is usually a positive number because

Quantity supplied increases in response to price increases.

If a 35 percent increase in price of golf balls led to an 42 percent decrease in quantity demanded, then the demand for golf balls is

Relatively elastic

If a firm raised its price and discovered that its total revenue fell, then the demand for its product is

Relatively elastic

If a 6 percent increase in income leads to a 4 percent increase in quantity demanded for audio books, the income elasticity of demand is

0.67

Which of the following items is likely to have the highest income elasticity of demand?

A vacation home in the Swiss Alps

At a price of $100, Beachside Canoe Rentals rented 11 canoes. When it increased its rental price to $125, 9 canoes were rented. Calculate the absolute value of the price elasticity of demand for canoe rentals, using the midpoint formula.

0.9

If 50 units are sold at a price of $20 and 80 units are sold at a price of $15, what is the absolute value of the price elasticity of demand? Use the midpoint formula.

1.62

A supply curve that is vertical

Is perfectly inelastic

In December 2014, the average price of gasoline in the United States was $2.50 per gallon and consumers bought 7 percent more gasoline than they had during April 2014, when the average price was $3.60 per gallon. Based these number, what's was the price elasticity of demand for gasoline from April 2014 to December 2014.

-0.23

When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent, and the sale of dips (like salsa and bean dip) fell 8 percent. This set of facts indicates that the cross-price elasticity between tortilla chips and dips is ______, so the two are _______.

-0.8; complements

Refer to Table 6-6. Based on the data in the table and using the midpoint formula, between a price of $9.99 and $14.99, the price elastic demand for books is

-1.35

The town of Bloomfield is well known for its basketball team. The price of basketball game tickets is determined by market forces. Table 6-8 above shows the demand and supply schedules for basketball games tickets. Refer to Table 6-8. What is the numerical value of the price elasticity of supply?

0

Calculate the income elasticity if an 8 percent increase in income leads to a 4 percent increase in quantity demanded for organic produce

0.5

Suppose a 4 percent increase in price results in a 2 percent increase in the quantity supplied of a good. Calculate the price elasticity of supply and characterize the product.

0.5; The product is inelastic.

Jaycee Jeans sold 40 pairs of jeans at a price of $40. When it lowered its price to $20, the quantity sold increased to 60 pairs. Calculate the absolute value of the price elasticity of demand. Use the midpoint formula.

0.6

Refer to Table 6-3. Over what range of prices is the demand elastic?

Between $14 and $16

Suppose that the price of a money clip increases from $0.75 to $0.90 and quantity supplied rises from 8,000 United to 10,000 units. Use the midpoint formula to calculate the price elasticity of supply

1.22

Refer to Table 6-3. Over what range of prices is the demand elastic?

Between $2 and $8

The price elasticity of supply for umbrellas is 2. Suppose you're told that following a price increase, quantity supplied increased by 30 percent. What was the percentage change in price that brought this about?

15 percent

Refer to Figure 6-11. What is the value of the price elasticity of supply between g and h?

2

The price elasticity of the supply of teenage labor services is approximately 1.36. Suppose the minimum wage rises form $7.25 per hour to $8.75. Using the midpoint formula, what is the approximate change in the quantity of teenage labor supplied?

25.5 percent

The price elasticity of the supply of teenage labor services is approximately 1.36. Suppose the minimum wage rises from $7.25 per hour to $8.75. Using the midpoint formula, what is the approximate change in the quantity of teenage labor supplied?

25.5 percent

Suppose the cross-price elasticity of demand between grapefruit and orange juice is approximately 6. What does this mean?

A 1 percent decrease in the price of grapes juice leads to a 6 percent increase in orange juice consumption.

Studies show that the income elasticity of demand for wine is approximately five. What does this mean?

A 1 percent increase in income leads to a 5 percent increase in wine consumption

Suppose the value of the price elasticity of demand is -3. What does this mean?

A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.

Suppose the value of the price elasticity of supply is 4. What does this mean?

A 1 percent increase in the price of the good causes quantity supplied to increase by 4 percent

Of the following which is the best example of good with a perfectly inelastic demand?

A diabetic's demand for insulin

Assume that the market for barley is in equilibrium and the demand for barley is inelastic. Predict what happens to the revenue of barley farmers if a prolonged drought reduces the supply of barley. The drought will cause farm revenue to

A rise because the percentage decrease in quantity sold is less than the percentage increase in price

Which of the following would result in a higher absolute value of the price elasticity of demand for the product?

A wide variety of substitutes are available for this good

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means that

An increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.

If tolls on a road can be raised significantly before commuters will consider using a free alternative, then an increase in tolls will result in

An increase in total revenue

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, then an increase in tolls will result in

An increase in total revenue

If a 5 percent increase in income leads to a 10 percent increase in quantity demanded for a product, this product is

An inferior good

An article in the Wall Street Journal noted the following: Instead of relying on a full-coach, round-trip unrestricted fare off about $2,000 between Cleveland and Los Angeles... Continental [Airlines] since June has offered a $716 unrestricted fare in that market...... Through October, the test resulted in about the same revenue that Continental thinks it would have collected with its higher fare. Source: Scotty McCartney, "Airlines Try Cutting Business Fares, Find They Don't all se Revenue," Wall Street Journal, November 22, 2002.

Approximately 1

Economists estimated that the price-cross elasticity of demand for beer and wine is -0.83 and the income elasticity of wine is 5.03. This means that

Beer and wine are complements and wine is a luxury good

Suppose the demand curve for hybrid cars shifts to the right. This will cause a relatively small increase in the price of hybrid cars if

Both demand and supply are elastic

Demand for a luxury item, such as a yacht, is likely to be

Both income elastic and price elastic

Which of the following goods would have the most inelastic demand? Big screen TVs Luxury cars Bread Ski vacations

Bread

If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because

Buyers of steel are more sensitive to a price change if they have more time to adjust to the price change

If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because

Buyers of steel are more sensitive to a price change if they have more time to adjust to the price change.

If a firm wanted to know whether the demand for its product was elastic, unit elastic, or inelastic, then the firm could

Change price a little bit and observe what happens to total revenue.

Which of the following products comes closest to having a perfectly inelastic demand?

Cholesterol medication in general

Barbara, the consummate hostess, proudly announced as she served dessert, "A port is often the perfect end to a meal, sipped with a piece of my scrumptious chocolate cake. "Evidently, Barbara views port and chocolate cake as

Complements

If the cross price elasticity of demand for computers and software is negative, this means the two goods are

Complements

Economists have estimated that the cross-price elasticity if demand between beer and spirits is -0.50, the income elasticity for spirits is 1.21 and the income elasticity for wine is 5.04. These elastic IFEs mean that beer and spirits are _____, and spirits and wine are _______.

Complements; luxuries

In order to prove that Motrin and Ibuprofen are substitutes, one should measure ______ and get a ________.

Cross-price elasticity; positive number

Refer to Figure 6-6. As price falls from P(A) to P(B), the quantity demanded increases the most along D(1); therefore

D(1) is more elastic than D(2) or D(3)

Consider the following pairs of items: a. shampoo and conditioner b. iPhones and earbuds c. a laptop computer and a desktop computer d. beef and pork e. air-travel and weed killer Which of the pairs listed will have cross-price elasticity of zero?

E only

A linear downward-sloping demand curve has price elastic it's (in absolute values) that

Decrease as price decreases

The price elasticity of demand for beef is estimated to be 0.60 (in absolute value). This means that a 20 percent increase in the price of beef, holding everything else constant, will cause the quantity of beef demanded to

Decrease by 12 percent

Jonah lives in a small town where there is only one Mexican restaurant. Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?

Demand is likely to be relatively inelastic.

Which of the following statements about the price elasticity of demand is correct?

Demand is more elastic in the long run than it is in the short run

Refer to Figure 6-8. Identify the two goods which are complements

Good X and Good Z

Refer to Figure 6-8. Identify the two goods which are substitutes

Good X and Good Z

Refer to Figure 6-8. Identify the two goods which are complements

Good Y and Good Z

Holding everything else constant, the absolute value of the price elasticity of demand for Saucony tennis shoes is ______ the price elasticity of demand for tennis shoes in general.

Greater than

If the absolute value of the price elasticity of demand for DVD movies is 0.8 then the elasticity of demand of the DVD for the movie The Hangover should be

Greater than 0.8 in absolute value

If the quantity demanded for a good rises as income rises then the income elasticity of demand for this good is _____ than 0, and the good is _____ good.

Greater; a normal

A demand curve that is horizontal indicates that the commodity

Has a large number of substitutes

A perfectly elastic demand curve is

Horizontal

Using cross-sectional data from the two Housing Assistance Supply Experiment (HASE) sites- Brown County, Wisconsin, and St. Joseph County, Indiana- John Mulford of Rand Research estimates the long-run "permanent" income elasticity of housing expenditures to be 0.45 for owners. Using this information, what is likely to happen to housing expenditures if the government increases income transfers to recipients in HASE sites?

Housing expenditures will increase

Price elasticity of supply is used to gauge

How response supplier are to price changes

Price elasticity of demand measures

How responsive quantity demanded is to a change in price

Which of the following statements is true?

If the price of a good is raised and total revenue increases, demand is inelastic

According to an article in the Wall Street Journal, unlike airlines, even elite hotels don't have sophisticated systems that can react quickly to changes in demand. Even if they could, many hoteliers say people don't respond that much to lower rates. "We've testes this, cutting our rates by $50 [per night], and we didn't see an appreciable response in occupancy," says Jim Schultenover, a Vice President for Ritz-Carlton. Source: Jesse Drucker, "In Times of Belt-Tightening, We Seek Reasonable Rates," Wall Street Journal, April 6, 2001.

Inelastic

If tolls on a road can be raised significantly before commuters will consider using a free alternative, demand for using the toll roads must be

Inelastic

If, for a given percentage decrease in price, quantity supplied decreases by a proportionately smaller percentage, then supply is

Inelastic

In May 2011, the average price of gasoline in the United States was $3.76 per gallon, and consumers purchased nearly 5 percent less gasoline than they had during May 2010, when the average price of gasoline was $2.79 per gallon. Based on these figures, May 2010 to May 2011, the demand for gasoline was

Inelastic

Opera Estate Girls' School is considering increasing its tuition to raise revenue. If the school believes that raising tuition will increase revenue it is assuming that the demand for attending the school is

Inelastic

When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent. This indicates that the demand for tortilla chips is

Inelastic

The demand for gasoline is the short run is

Inelastic because there are very few good substitutes for gasoline

If demand is perfectly elastic, the absolute value of the price elasticity coefficient is

Infinity

Refer to Table 6-5. Katie Graham owns a kayak rental service in Santa Barbara. Table 6.5 shows her estimated demand schedule for kayak rentals per week. She would like to increase her sales revenue by changing the price she charges for rentals present she charges $75. Based on the information in the table, Katie

Is not able to increase her revenue by changing her price because the demand for kayak rentals is unit elastic

With the increased usage of cell phone services, what has happened to the price elasticity of demand for land-line telephone services?

It has become more price elastic

Which of the following statements about the price elasticity of demand along a downward-sloping linear demand curve is true?

It is elastic at high prices and inelastic at the lowest prices.

Which of the following statements about the price elasticity of demand along a downward-sloping linear demand curve is true?

It is elastic at the highest prices and inelastic at lowest prices

Jenna runs a small boutique in Capitola. She tells one of her suppliers that she is willing to pay $6 for a pair of wool hand warmers and not a dime more. On the basis of this information, what can you conclude about her price elasticity of demand for wool hand warmers?

It is perfectly elastic

Seth is a competitive body builder. He says he has to have his 12-oz package of protein powder to "feed his muscles" every day. On the basis of this information, what can you conclude about his price elasticity of demand for protein powder?

It is perfectly inelastic

Rank these three items in terms of the elasticity of the demand for them at any given price, from most elastic to least elastic: hot beverages, coffee and Peet's Coffee.

Peet's Coffee, coffee, hot beverages

Cross-price elasticity of demand is calculated as the

Percentage change in quantity demanded of one good divided by percentage change in price of a different good

The cross-price elasticity of demand measures the

Percentage change in the quantity demanded of one good divided by the percentage change in the price of another good

If a supply curve is a horizontal line, supply is said to be

Perfectly elastic

At a price of $8 per dozen, Chuy sells 40 dozen homemade tamales per week. When he raised her price to $12 per dozen, he still sold 40 dozen per week. Based on this information, the demand for his tamales is

Perfectly inelastic

Carrie Bradshaw claims that when it comes to buying shoes, "price is no object." If this is true, then her demand for shoes is

Perfectly inelastic

The demand for all carbonated beverages as a whole is likely to be ______ the demand for Dr.Pepper

Less elastic than

If demand is inelastic, the absolute value of the price elasticity of demand is

Less than one

Refer to Figure 6-4. The elastic segment of the demand curve

Lies below the midpoint of the curve

Refer to Figure 6-9. The data in the diagram indicates that DVDs are

Luxury goods

The larger the share of a good in a consumer's budget, holding everything else constant, the

More price elastic is a consumer's demand

Last year, Joan bought 50 pounds of hamburger when her household's income was $40,000. This year, her household income was only $30,000 and Joan bought 60 pounds of hamburger. All else constant, Joan's income elasticity of demand for hamburger is

Negative, so Joan considers hamburger to be an inferior good

Last year, Sefton purchased 60 pounds of potatoes to feed his family of five with his household income was $30,000. This year, his household income fell to $20,000 and Ceftin purchased 80 pounds of potatoes. All else constant, Sefton's income elasticity of demand for potatoes is

Negative, so Sefton and considers potatoes to be an inferior good

Refer to Figure 6-4. The absolute value of the price elasticity of demand at the midpoint of the demand curve is

One

Which of the following pairs of goods is likely to have a negative cross-price elasticity of demand?

Pancakes and syrup

Refer to Figure 6-1. A perfectly inelastic demand curve is shown in

Panel A

Refer to Figure 6-1. A perfectly elastic demand curve is shown in

Panel B

Refer to Figure 6-1. The demand curve on which elasticity changes at every points is given in

Panel C

Refer to Figure 6-10. A unit-elastic supply curve is shown in

Panel C

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is

Relatively inelastic

When there are few close substitutes available for a good, demand tends to be

Relatively inelastic

If the demand for a life-saving drug was perfectly inelastic and the price doubled, the quantity demanded would

Remain constant

Refer to Figure 6-12. Suppose the diagram shows the supply curve for a product in the short run and in the long run. Which supply curve represents supply in the short run and which curve represents supply in the long run?

S(A) represents supply in the short run and S(B) represents supply in the long run

Jill aborts believes that the price elasticity of demand for her economics textbook is relatively inelastic. She argues "I was told I had to purchase a book written by Hubbard and O'Brien that is required by my instructor. If I wanted to buy a mystery novel I would have many authors to choose from. Therefore, the demand for mystery novels is more elastic that the demand for my textbook." Is Jill correct?

She is correct

If the cross-price elasticity of demand between beer and wine is 0.31, then beer and wine are

Substitutes

Suppose at the going rate wage rate of $20 per hour, firms can hire as many hours of janitorial services as they desire. If any firm tries to lower the wage rates for $19, it will not be able to hire any janitor. What does this indicate about the supply curve for janitorial services?

Supply is perfectly elastic

In general, a "big ticket item" such as a house or new car will

Tend to have a more elastic demand than a lower-priced good

The most important determinant of the price elasticity of demand for a good is

The availability of substitutes for the good

In September 2006, the Food and Drug Administration recommended that Americans avoid eating bagged raw spinach in the wake of an outbreak of E. coil bacteria. Following this recommendation, the food industry looked at alternatives and many turned to arugula. One Chicago distributor claimed, "The sale of the stuff had gone through the roof." Based on this information

The cross-price elasticity between arugula and spinach is positive

Suppose the California Nurses Union successfully secured a 12 percent increase in the wages of registered nurses. If a hospital responds by reducing the quantity of registered nurses hired and increasing the quantity of physician's assistants hired, what conclusion can you draw?

The cross-price elasticity of demand between registered nurses and physician's assistants is positive

If the absolute value of the price elasticity of demand for aspirin equals 0.8 then

The demand for aspirin is inelastic

Assume that when the price of cantaloupes is $2.50 the demand for cantaloupes is unit-elastic, and that the demand curve for cantaloupes is linear and downward sloping. If firms lower the price of cantaloupes to $2.00 which of the following statements can be made regarding the price elasticity of demand for cantaloupes?

The demand for cantaloupes at $2.00 must be inelastic

During an economic expansion as consumer incomes rise, holding everything else constant

The demand for luxuries will rise while the demand for inferior goods will fall

Suppose a decrease in the supply of paper results in an increase in revenue. This indicates that

The demand for paper is inelastic

Refer to Table 6-1. Suppose you own a bookstore. You believe that you can sell 40 copies per day of the latest John Grisham nivel when the price is $35. You consider lowering the price to $25 and believe this will increase the quantity sold to 50 books per day. Compute the price elasticity of demand using the midpoint formula and these data. Select the correct implication from your work

The demand for the John Grisham book is inelastic. Revenue will fall if the price is lowered

When demand is elastic, a fall in price causes total revenue to rise because

The increase in quantity sold is large enough to offer the lower price

The slope of a demand curve is not used to measure the price elasticity of demand because

The measurement of slope is sensitive to the units chosen for price and quantity

Suppose the demand curve for a product is represented by a typical downward-sloping curve. Now suppose the demand for this product increases. Which of the filling statements accurately predicts the resulting increase in price?

The more elastic the supply curve, the smaller the price

Suppose the demand curve for a product is represented by a typical downward-sloping curve. How suppose the demand for this product decreases. Which of the following statements accurately predicts the resulting decrease in price?

The more elastic the supply curve, the smaller the price decrease

Holding everything else constant, the demand for a good tends to be more elastic

The more substitutes there are for the good

The price elasticity of demand is equal to

The percentage change in quantity demanded divided by the percentage change in price

When demand is unit elastic, a change in price causes total revenue to stay the same because

The percentage change in quantity demanded exactly offsets the percentage change in price

To calculate the price elasticity of supply, we divide

The percentage change in quantity supplied by the percentage change in price

The price elasticity of supply is equal to

The percentage change in quantity supplied divided by the percentage change in price

The cross-price elasticity of demand between Coca-Cola and Pepsi-Cola is calculated by dividing

The percentage change in the quantity demanded of Coca-Cola by the percentage change in the price of Pepsi-Cola

The publisher of a magazine gives his staff the following information: He tells the staff, "Our costs are currently $150.000 more than our revenues each month. I propose to eliminate this problem by raising the price of the magazine to $3.00 per issue. This will result in our revenue being exactly equal to our cost." Refer to Table 6-4. Which of the following statements is correct?

The publishers analysis is correct only if the demand is perfectly inelastic

The cross-price elasticity between Gillette razors and a related good is -3.4. What happens to the demand for the related good if the price of Gillette razors falls by 10 percent?

The quantity demanded of the related good rises by 34 percent.

Suppose the cross-price elasticity of demand between DVDs at Amazon.com and DVDs at Rakuten.com is 3.5. Based on this information, predict what happens when Amazon.com lowers its DVD prices by 10 percent.

The quantity of DVDs demanded on Rakuten.com will decrease by 35 percent

The income elasticity of demand measures

The responsiveness of quantity demanded to changes in income

The price elasticity of demand measures

The responsiveness of quantity supplied to changes in price

Assume that the demand curve for sunblock is linear and downward sloping. Which of the following statements about the slope of the demand curve for sunblock and the price elasticity of demand of sunblock are true?

The slope is constant, but the rice elasticity of demand is not constant at all points along the demand curve for sunblock

The town of Bloomfield is well known for its basketball team. The price of basketball game tickets is determined by market forces. Table 6-8 above shows the demand and supply schedules for basketball games tickets. Refer to Table 6-8. What is the most distinctive feature of the supply curve?

The supply curve is perfectly inelastic

If the quantity of walkie-talkies supplies increases by 5 percent when price increases by 12 percent, then

The supply of walkie-talkies is inelastic

Which of the following is a key determinant of the price elasticity of supply?

The time it takes to change output in response to a change in price

If the cross-price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that

The two brands of detergent are close substitutes

Which of the following statements about price elasticity of demand is false?

The value of the price elasticity of demand is the reciprocal of the value of the demand curve's slope

If the market for a product is broadly defined, then

There are few substitutes for the product and the demand for the product is relatively inelastic

If the market for a product is broadly defined, then

There are few substitutes for the product and the demand for the product is relatively inelastic.

Which of the following correctly comments on the following statement? "The only way to increase the revenue from selling a product is to increase the product's price."

This statement is not true. Revenue will increase as the price of the product increases only if demand is inelastic.

The midpoint formula is used to measure the elasticity of demand between two points on a demand curve

To ensure that we have only one value of the price elasticity of demand between two points on a demand curve

At a price of $20, Daphne sells 35 hand-painted dog collars per week. When she raised her price to $25, she sold 28 per week. Based on this information, the demand for her dog collars is

Unit elastic

If a firm lowered the price of the product it sells and found that total revenue did not change, then the demand for its product is

Unit elastic

If the price elasticity of demand for insulin is equal to zero then the demand curve for insulin is

Vertical

Perfectly inelastic demand is represented by a demand curve which is ______, and relatively inelastic demand is represented by a demand curve which is _______.

Vertical; downward sloping

If the slope of a demand curve is equal to -0.1 then

We don't know whether the demand is elastic or inelastic.

Along a downward-sloping, linear demand curve, total revenue is the greatest

Where demand is unit elastic

If the percentage increase in price is 15 percent and the value of the price elasticity of demand is -3, then quantity demanded

Will decrease by 45 percent

If the demand for a product is perfectly inelastic, a decrease in the price of the product

Will decrease roto al revenue

If demand is perfectly inelastic, the absolute value of the price elasticity of demand is

Zero