A If the demand for a life-saving drug was perfectly inelastic and the price doubled, the quantity demanded would_:īe cut in half. C If, for a given percentage increase in price, quantity demanded falls by a smaller percentage, then demand is_: What does this mean?Ī 3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent.Ī 1 percent increase in the price of the good causes quantity demanded to increase by 3 percent.Ī 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.Ī $1 increase in price causes quantity demanded to fall by 3 units. A(wrong), D Suppose the value of the price elasticity of demand is -3. Although it raised tuition and fees by 29 percent, enrollment in the freshman class rose by 37 percent.īased on the information above, the demand for Hendrix College education is:ĭ) relatively elastic. Pepper, in particular.ĭ) more price elastic than B Facing stiff competition, Hendrix College, a small liberal arts institution in Conway, Ark., decided two years ago to bolster its academic offerings, promising students at least three hands-on experiences outside the classroom, including research, internships and service projects. D The demand for all carbonated beverages in general is likely to be _ the demand for Dr. On the basis of this information, what can you conclude about the price elasticity of demand for her wool hand warmers?Į) It is unit elastic. Jenna tells the supplier that she is only willing to pay $6 for a pair of wool hand warmers and not a dime more. ![]() One day supplier tells her that they are planning to increase the price of a pair of wool hand warmers from $6 to $6.80. A Jenna runs a small boutique in Lansing. Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant?Ī) Demand is likely to be relatively price inelastic.ī) Demand is likely to be perfectly price inelastic.Ĭ) Demand is likely to be relatively price elastic.ĭ) Demand is likely to be perfectly price elastic. ![]() B Jonah lives in a small town where there is only one Mexican restaurant. The inelastic segment of the demand curveĭ) is coincident with the vertical axis.
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