4. "Economists use price elasticity of demand to measure demand sensitivity as a result of price changes for a given product. This measurement can be useful in forecasting consumer behavior and economic events, such as a recession.In business and economics, price elasticity refers to the degree to which individuals, consumers, or producers change their demand or the amount supplied in response to price or income changes. It is predominantly used to assess the change in consumer demand as a result of a change in a good or service's price". In an economy of imaginary Island the price of a commodity falls from $225 to $ 186, the quantity demanded increases from 300 to 480. a. Calculate the Elasticity of demand and find the type of elasticity? (5 marks) b. Explain the factors affecting the demand for a product? (any 3)

4. "Economists use price elasticity of demand to measure demand sensitivity as a result of price changes for a given product. This measurement can be useful in forecasting consumer behavior and economic events, such as a recession.In business and economics, price elasticity refers to the degree to which individuals, consumers, or producers change their demand or the amount supplied in response to price or income changes. It is predominantly used to assess the change in consumer demand as a result of a change in a good or service's price". In an economy of imaginary Island the price of a commodity falls from $225 to $ 186, the quantity demanded increases from 300 to 480. a. Calculate the Elasticity of demand and find the type of elasticity? (5 marks) b. Explain the factors affecting the demand for a product? (any 3)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. "Economists use price elasticity of demand to measure demand sensitivity as a result of price changes
for a given product. This measurement can be useful in forecasting consumer behavior and economic
events, such as a recession.In business and economics, price elasticity refers to the degree to which
individuals, consumers, or producers change their demand or the amount supplied in response to price
or income changes. It is predominantly used to assess the change in consumer demand as a result of a
change in a good or service's price".
In an economy of imaginary Island the price of a commodity falls from $225 to $ 186, the quantity
demanded increases from 300 to 480.
a. Calculate the Elasticity of demand and find the type of elasticity? (5 marks)
b. Explain the factors affecting the demand for a product? (any 3)

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