If price decreases by 8 percent and quantity supplied decreases by 2 percent, supply is

If you're seeing this message, it means we're having trouble loading external resources on our website.

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

ECON 1000 – Microeconomics Cameron Douglas

Chapter 5: Test Questions

When demand is inelastic: there is a small response in quantity demanded when the price rises.

When the price of an item was raised from $12 to $18, the quantity supplied increased from 800 to 1200

per month. The price elasticity of supply is 1.00. Supply is unit elastic.

A clothing store decreases the price of its T-shirts from $20-$16. Corresponding, sales increase from

1200 to 2800 per month. The total revenue increased, indicating that demand is elastic.

Which of the following statements is true?: Products or services in which inputs are readily available

have a more elastic supply.

Suppose that Norma is disappointed in the revenue from her custom dress shop. She is thinking of

raising the price, but she asks you for advice. You decide she should raise the price if demand is

inelastic.

An important factor affecting price elasticity of supply is availability of additional inputs.

A DVD store lowered the price of its DVD's from $11 to $9. Correspondingly, sales increased from 800 to

1200 per month. Ignoring the negative sign, what is the price elasticity of demand?: 2.00. Demand is

elastic.

If the price elasticity of supply is 2.0, when prices rise by 10%, the quantity supplied will: increased by

20.0% and the supply is considered elastic.

Suppose the demand and supply in a market area as in the figure at right. A sales tax of $1 is imposed on

this product. The tax revenue the government recieves from the sales tax is $5. The entire tax will be

paid by sellers.

When the Ottawa Citizen newspaper lowered the weekly subscription price from $5.00 to $3.75 - a

savings of 25% - the number of subscriptions sold increased by 5%. This suggests that their customers

have inelastic demand and that the lower price decreased.

Introductory Business Statistics

1st EditionAlexander Holmes, Barbara Illowsky, Susan Dean

2,174 solutions

Statistical Techniques in Business and Economics

15th EditionDouglas A. Lind, Samuel A. Wathen, William G. Marchal

1,236 solutions

Principles of Economics

7th EditionN. Gregory Mankiw

1,394 solutions

Century 21 Accounting: General Journal

11th EditionClaudia Bienias Gilbertson, Debra Gentene, Mark W Lehman

1,009 solutions

When a 2 percent increase in price generates a greater than 2 percent decrease in quantity demanded then quizlet?

When the price elasticity of demand is 2 and the price increases by 10 percent the quantity demanded?

When the price increases 10 The quantity supplied increases 15%?

When the price of a good increased by 5 percent the quantity demanded of it decreased 10 percent?