The price elasticity of demand for bread is
a. computed as the change in the price of bread divided by the change in the quantity demanded of bread.
b. independent of the availability of close substitutes.
c. influenced by whether consumers view bread as a necessity or luxury.
d. All of the above are correct.
c
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A price ceiling does NOT lead to a deadweight loss if ________
A) the equilibrium market price lies below the price ceiling B) the equilibrium market price lies above the price ceiling C) the price elasticity of market demand is greater than 1 D) the price elasticity of market supply is greater than 1
If the cross price elasticity of demand for fries with respect to hamburgers equals -1.2, then: a. a 1% increase in the quantity of hamburgers purchased will lead to a 1.2% increase in the price of fries
b. a 10% increase in the price of a hamburger will lead to a 12% increase in the quantity of fries demanded at a given price. c. a 1% decrease in the price of a hamburger will lead to a 1.2% increase in the quantity of fries demanded at a given price. d. a 10% increase in the quantity of hamburgers purchased will lead to a 12% increase in the price of fries.