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PED is

Demand for a product is inelastic. What will be the effect of a fall in price?

PED and PES

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An #Economics quiz about #PED and #PES

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Questions 10

Answers

1
Demand for a product is inelastic. What will be the effect of a fall in price?
Total revenue will fall
Demand will not change
Demand will change by a greater percentage
Total revenue will rise
2
PED is
A measure of the change in price when total revenue changes
A measure of the responsiveness of demand to change in price
A measure of the change in total revenue when price changes
A measure of the responsiveness of price to change in demand
3
Price elasticity of supply is 0.8.
Supply is perfectly inelastic
Supply is perfectly elastic
Supply is inelastic
Supply is elastic
4
Price increases from £10 to £12. Supply increases from 100 to 130. PES is
3.0
0.6
1.5
1.2
5
What characteristic is likely to make demand for a product elastic?
It is habit forming
It is relatively cheap
It has close substitutes
It is a necessity
6
The formula for calculating PES is
Change in P/Change in S
% change in P/% change in QS
Change in S/Change in P
% change in QS/% change in P
7
The longer the time period
The more elastic is supply
The lower is supply
The less elastic is supply
The higher is supply
8
Price up from £60 to £90; demand contracts from 800 to 600. PED is
Perfectly elastic
Elastic
Unity
Inelastic
9
The formula for calculating PED is
% change QD/% change P
Change in P/Change in QD
Change in QD/Change in P
% change P/% change QD
10
In what circumstance would supply of a product be elastic?
It can be stored
It takes time to produce
It uses resources which are in short supply
It is costly to produce