Engineering Board Exam Reviewer · Basic Economic Concepts · easy
When the price of a good rises by 10%, the quantity demanded falls by 15%. Find the price elasticity of demand.
- 1.5
- -0.67
- -1.5
- -0.15
Answer
C. -1.5
Solution
E=% Q/% P=-15%/10%=-1.5. Since |E|>1, demand is elastic.
More Basic Economic Concepts questions
- Which of the following best describes "necessity" goods in economics?
- Which of the following best describes "luxury" goods?
- According to the law of demand, as the price of a good increases (all else equal), what happens to the quantity demanded?
- According to the law of supply, as the price of a good increases (all else equal), what happens to the quantity supplied?
- In a perfectly competitive market, how many buyers and sellers are typically present, and what is their influence on price?
- A market situation with only one seller and many buyers is called:
- A market situation with only one buyer and many sellers is called:
- A market situation with only a few sellers dominating the market is called:
- The supply of a product is Qs=200+5p and the demand is Qd=1,000-15p, where p is the price in pesos. Find the equilibrium price.