Chapter 6, Problem 11P

To determine

To Explain:

1. The reason for what has happened in terms of elasticity if the revenue of the semiconductor chips suppliers rises after the earth quake which severely damages the production facilities of chip producing companies. Explain with a diagram.
2. The reason for what has happened in terms of elasticity if the revenue of the semiconductor chips suppliers falls after the earth quake which severely damages the production facilities of chip producing companies. Explain with a diagram.

Concept Introduction:

Elasticity of Demand:

The degree of responsiveness of quantity demanded in response to change in price or other demand determining factors.