Use the demand diagram below to answer this question. Note that P x Q equals $900 at every point on this demand curve. ... 45 30 20 15 10 10 15 20 30 Demand Q Which of the following statements correctly describes own-price elasticity of demand, for this particular demand curve? 1. Demand is unit elastic at a price of $30, and elastic at all prices greater than $30. II. Demand is unit elastic at a price of $30, and inelastic at all prices less than $30. III. Demand is unit elastic for all prices. a) I and II only. b) I only. c) I, II and III. d) Ill only.

Use the demand diagram below to answer this question. Note that P x Q equals $900 at every point on this demand curve. ... 45 30 20 15 10 10 15 20 30 Demand Q Which of the following statements correctly describes own-price elasticity of demand, for this particular demand curve? 1. Demand is unit elastic at a price of $30, and elastic at all prices greater than $30. II. Demand is unit elastic at a price of $30, and inelastic at all prices less than $30. III. Demand is unit elastic for all prices. a) I and II only. b) I only. c) I, II and III. d) Ill only.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 4.9P: (Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of...

See similar textbooks

Similar questions

If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
What is the formula for line cross-price elasticity of demand?
If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?
What is the price elasticity of demand? Can you explain it in your own words?
Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
(Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of demand measures, for a given price, the __________ in quantity demanded divided by the __________ income from which it resulted. b. If a decrease in the price of one good causes a decrease in demand for another good, the two goods are __________. c. If the value of the cross-price elasticity of demand between two goods is approximately zero, they are considered __________.
Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3. What will happen to the demand for apples?