What are the three cases for the price elasticity of demand? Briefly define each
What will be an ideal response?
Demand can be elastic, inelastic, or unit elastic. Elastic demand occurs when the percentage change in quantity demanded exceeds the percentage change in price. Inelastic demand occurs when the percentage change in quantity demanded is less than the percentage change in price. Unit elasticity occurs when the percentage change in price equals the percentage change in demand.
You might also like to view...
If the expected path of 1-year interest rates over the next five years is 2 percent, 4 percent, 1 percent, 4 percent, and 3 percent, the expectations theory predicts that the bond with the lowest interest rate today is the one with a maturity of
A) one year. B) two years. C) three years. D) four years.
Which of the following can be demonstrated using a Lorenz curve?
a. The size of total production in a household b. All possible consumption combinations of goods that someone can afford c. The social rate of return of antipoverty programs d. Income distribution across a population