5. Assume the demand for plastic surgery is price inelastic. Are the following statements true of...

5. Assume the demand for plastic surgery is price inelastic. Are the following statements true of false? Explain.

a. When the price of plastic surgery increases, the number of operations decreases.

b. The percentage change in the price of plastic surgery is less than the percentage change in quantity demanded.

c. Changes in the price of plastic surgery do not effect the number of operations.

d. Quantity demanded is quite responsive to changes in price.

e. If more plastic surgery is performed, expenditures on plastic surgery will decrease.

f. The marginal revenue of another operationis negative.

Solutions

Expert Solution

This is true because if a price increases the demand will decrease but because we are assuming that plastic surgery is inelastic, the demand that is decreased is less than the price change that is increased.
The percentage change in the price of plastic surgery is less than the percentage change in the quantity demanded could be a true statement. If the price of plastic surgery increases, the demand for plastic surgery will more than likely stay the same. If the price for plastic surgery decreases, a small percentage of people may elect to have the surgery, but due to the factor of inelasticity, it will not change enough to affect a demand curve.
Changes in the price of plastic surgery do not affect the number of operations is a true statement because we assumed plastic surgery being an inelastic. Inelasticity means that the price does not affect the number of procedures completed because it does not affect the demand curve.
Quantity demanded is quite responsive to changes in price. This statement is False, as in price inelastic is responsive to demand not the changes in price.’
True. If the demand is price inelastic, consumers are less responsive to price changes. If more plastic surgeries are performed, the price should go down.
“Marginal revenue of another operation is negative.” Is a false statement. If plastic surgery is inelastic, then the marginal revenue should not increase or decrease because the plastic surgery sales will not change.

Rahul Sunny answered 1 year ago

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