Chapter 6 Elasticity

Question 1

price elasticity of demand

Answer 1

percentage change in quantity demanded of a good resulting from 1% change in price
|(%

Question 2

elasticity of supply

Answer 2

%change in quantity supplied / %change in price

Question 3

inelastic demand

Answer 3

> 1

Question 4

elastic demand

Answer 4

< 1

Question 5

unit elastic

Answer 5

== 1

Question 6

if elasticity of demand >1

Answer 6

decreasing price, increases total revenue

Question 7

if elasticity of demand < 1

Answer 7

increasing price increases total revenue