If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 percent increase in the quantity demanded, the price elasticity of demand is We can conclude that the elasticity of demand is 0.30; inelastic. 0.60; elastic. 0.83; inelastic. O 1.20; high.

If a rightward shift of the supply curve leads to a 6 percent decrease in the price and a 5 percent increase in the quantity demanded, the price elasticity of demand is We can conclude that the elasticity of demand is 0.30; inelastic. 0.60; elastic. 0.83; inelastic. O 1.20; high.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Elasticity of Demand and Supply

The elasticity of demand and supply are two important concepts of microeconomics. The elasticity of demand measures the responsiveness of consumers’ demands to the price change, changes in income of consumers, and changes in the price of the related goods. Similarly, the elasticity of supply refers to the proportionate change in the quantity supplied due to the proportionate change in the price. In other words, it can be said that elasticity of supply measures how the quantity of supply changes when the price changes of that particular product.

Question

If a rightward shift of the supply curve leads to a 6
percent decrease in the price and a 5 percent
increase in the quantity demanded, the price
elasticity of demand is
the elasticity of demand is
We can conclude that
0.30; inelastic.
O 0.60; elastic.
0.83; inelastic.
O 1.20; high.

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