price elasticity of demand

Question 1

price elasticity of demand def

Answer 1

how demand responds to a change in price

Question 2

price elasticity of demand equation

Answer 2

% change in quantity/% change in price

Question 3

elastic vs inelastic

Answer 3

elastic, responds to changes. if elastic there are substitutes. inelastic or irreplaceable means price does not effect quantity demanded.

Question 4

examples of products with high elasticity

Answer 4

luxury items and consumer discretionary items(non essential but desirable items) such as a brand of cereal or candy bars.

Question 5

when is it inelastic vs elastic

Answer 5

elastic if pe is greater or equal to one, if less than one it’s inelastic.

Question 6

factors that influence elasticity

Answer 6

income level and available substitutes

Question 7

examples of goods with inelasticity

Answer 7

utilities, prescription drugs, gasoline, tobacco products.

Question 8

is inelastic steep or flat

Answer 8

steep

Question 9

is elastic steep or flat

Answer 9

flat

Question 10

unit elastic means

Answer 10

elasticity is 1, % change in quantity=% change in price

Question 11

factors of demand elasticity

Answer 11

availability of substitutes, nature of the item, fraction of income spent, amount of time available