ECON 201 Chapter Notes - Chapter 6: Peanut Butter, Unit, Demand Curve

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14 Mar 2017

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6. 1: the price elasticity of demand and its measurement. Law of demand - when the price of a product alls, the quantity demanded of the product increases but only tells firms that demand curves slope downward. The measurement of slope is sensitive to the units chosen for quantity and price. Use percentage change (not dependent on units of measurement. Price elasticity of demand - the responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the product"s price. Price elasticity of demand = percentage change in quantity demanded / percentage change in price. The price elasticity of demand is not the same as the slope of the demand curve. Price elasticity of demand for a price cut. Percentage change in price will be negative. Percentage change in quantity demanded will be positive. Price elasticity of demand for a price increase.

Related Questions

Which of the following statements about price elasticity of demand is false?

a) The value of price elasticity of demand is the reciprocal of the value of the demand curve's slope

b) If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic

c) The value of price elasticity of demand along a downward sloping demand curve is always negative

d) A linear downward sloping demand curve has a varying price elasticity coefficient

crimsonreindeer712

interval (or arc) elasticity

cross-price elasticity

price elasticity of demand

elastic demand

income elasticity

inelastic demand

inframarginal units

marginal revenue

point elasticity

price effect

quantity effect

total revenue

unitary elastic demand

1. __________________ A measure of consumersâ sensitivity or responsiveness to changes in the price of a good or service.

2. ___________________ When the percentage change in price (in absolute value) is more than the percentage change in quantity demanded (in absolute value).

3. ___________________ When the percentage change in quantity demanded (in absolute value) is more than the percentage change in price (in absolute value).

4. ___________________ When the percentage change in quantity demanded (in absolute value) is just equal to the percentage change in price (in absolute value).

5. ___________________ Total amount paid to a producer for a good or service P * Q.

6. ___________________ The effect on total revenue of a change in price, holding quantity constant.

7. ___________________ The effect on total revenue of a change in quantity, holding price constant.

8. ___________________ An elasticity calculated over an interval of a demand curve or demand schedule.

9. ___________________ Elasticity at a specific price or point on a demand curve.

10. ___________________ A measure of how responsive quantity demanded is to a change in income, all other things constant.

11. ___________________ A measure showing how responsive the quantity demanded of one good is to changes in the price of another good, other factors constant.

12. ___________________ The additional revenue received by producing and selling one more unit of output.

13. ___________________ Units of output that could have been sold at a higher price had the firm not lowered its price to sell additional (marginal) units.

coffeehornet269

Which of the following statements about price elasticity of demand is false?
A) The value of the price elasticity of demand is the reciprocal of the value of the demand curve's slope.
B) If quantity demanded changes by a larger percentage than the percentage change in price, demand is elastic.
C) The value of the price elasticity of demand along a downward-sloping demand curve is always negative.
D) The elasticity is different on every point of a linear downward-sloping demand.

crimsonreindeer712

ECON 201 Chapter Notes - Chapter 6: Peanut Butter, Unit, Demand Curve

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