Midterm 1 Review Flashcards
1
Q
Demand is perfectly inelastic when
A
E=0 (Vertical Demand Curve)
2
Q
demand is elastic when
A
e>1
3
Q
demand is perfectly elastic when
A
e=infinity
4
Q
demand is unit elastic when
A
e=1
5
Q
demand is inelastic when
A
0<e<1
6
Q
midpoint formula
A
[(change in quantity/avg. quantity) x 100] / [(change in price/avg. price) x 100]
7
Q
what happens when an inelastic demand increases price?
A
Revenue Increases
8
Q
what happens when unit elastic increases price?
A
revenue stays the same
9
Q
what happens when elastic demand increases price?
A
revenue decreases
