econ II

if the price elasticity of demand for a good is -0.4, then a 10% increase in price results in a

4% change in the quantity demanded

if the price elasticity of demand for a good is -4.0, then a 10% increase in price results in a

40% decrease in the quantity demanded

Goods with many close substitutes tend to have

More elastic demnads

For a good that is a necessity

demand tends to be inelastic

Demand is elastic if elasticity is

greater than 1 in absolute value

Suppose that quantity demand rises by 10% as a result of a 15% decrease in price. The price elasticity of demand for this good is

inelastic and equal to -0.67

the price elasticity of demand for eggs

is computed as the percentage change in quantity demanded of eggs divided by the percentage change in price of eggs.

if the price of natural gas rises, when is the price elasticity of demand likely to be the highest?

one year after the price increase

The price elasticity of demand measures how much

quantity demanded responds to a change in price.

The flatter the demand curve through a given point, the

the greater the price elasticity of demand at that point