1. The quantity demanded of a product generally __________(increases/decreases) as the price of the product...

1. The quantity demanded of a product generally __________ (increases/decreases) as the price of the product falls, ceteris paribus.

2. The supply curve depicts the relationship between the __________ and the __________.

3. From the following list, choose the variables that are held fixed when drawing a market supply curve:
•The price of the product
•Wages paid to workers
•The price of materials used in production
•Taxes paid by producers
•the quantity of the product purchased

Expert Solution

1. The quantity demanded of a product generally increases as the price of the product falls, ceteris paribus.

Note: According to Law of Demand, higher the price lower the demand and Lower the price higher the demand.

2. The supply curve depicts the relationship between the Price and the Quantity Supplied.

3. From the following list, choose the variables that are held fixed when drawing a market supply curve:

Wage paid to workers
The price of the materials used in production
Taxes paid by producers.

Note: The supply curve represents different level of quantity supplied at various price level. Thus, price and quantity supplied are variable in supply curve. With this rationale we can conclude that wages paid, price of materials used and taxes remains fixed.

Rahul Sunny answered 2 years ago

Suppose the price of apples increases from $22 to $25, and in response quantity demanded decreases...

Suppose the price of apples increases from $22 to $25, and in response quantity demanded decreases from 120 to 96. Using the mid-point formula, what is the price elasticity of demand? (Note: your answer should be correct to two decimal places; and be sure to express your answer as a positive number.)

If income increases by 12 percent and the quantity demanded of a good then decreases by...

If income increases by 12 percent and the quantity demanded of a good then decreases by 6 percent, the good is: A) inferior and income-inelastic. B) inferior and income-elastic. C) normal and income-inelastic. D) normal and income-elastic.

If the price elasticity of demand for cigarettes is –0.50 and the price of cigarettes increases 10%, the quantity demanded of cigarettes decreases by 50%.

True or False?If the price elasticity of demand for cigarettes is –0.50 and the price of cigarettes increases 10%, the quantity demanded of cigarettes decreases by 50%.

1) Suppose the price of a good increases 5%, and the quantity demanded falls 8%. The...

1) Suppose the price of a good increases 5%, and the quantity demanded falls 8%. The ----- of this good is -----. supply, unit elastic demand, perfectly elastic demand, inelastic demand, elasti 2) Suppose that when the price of a good increases from $120 to $132 per unit, the quantity demanded falls from 33 to 30 units. Using the midpoint method calculate price elasticity demand. -1 -1.25 3.0 -0.1 3) Along a straight-line demand curve, demand at higher prices is...

An increase in the price of ground beef - A. increases the quantity demanded of ground...

An increase in the price of ground beef - A. increases the quantity demanded of ground beef. B. decreases the demand for ground beef. C. increases the demand for chicken, a substitute for ground beef. I believe that the correct answer is B, but I need to write a big explanation for why its is correct.

1. Assume the price of Super Bowl Tickets increases by 20% and the quantity demanded changes...

1. Assume the price of Super Bowl Tickets increases by 20% and the quantity demanded changes by 2%. a. What is the price elasticity of demand for Super Bowl Tickets? b. Is it elastic, inelastic, or unit elastic? 2. When the price of Lays Potato chips decreases by 5%, the quantity demanded for them changes by 15%. a. What is the price elasticity of demand for Lays Potato Chips? b. Is it elastic, inelastic, or unit elastic? 3. Assume demand...

f. If a 2 percent decrease in the price of strawberries increases the quantity demanded of...

f. If a 2 percent decrease in the price of strawberries increases the quantity demanded of strawberries by 6 percent and increases the quantity of whipped cream demanded by 5 percent, calculate: i. Price elasticity of demand for strawberries. (1 mark for correct calculation, I mark for interpretation). 6% ------=3 Price elasticity of demand for strawberries is relatively elastic. -2% ii. Cross elasticity of demand for whipping cream with respect to the price of strawberries. (1 mark for correct calculation,...

According to the law of demand, if price increases, quantity demanded of a good or service...

According to the law of demand, if price increases, quantity demanded of a good or service will decrease or vice versa. Price elasticity of demand tells us how much quantity demanded will decrease when price increases or how much quantity demanded will increase if price decreases.On the other hand, according to the law of supply, if the price increases, quantity supplied of a good or service will increase. Similarly, if price decreases, quantity supplied will decrease. The degree of sensitivity...

When the price of fresh fish increases 10%, quantity demanded is unchanged. The price elasticity of...

When the price of fresh fish increases 10%, quantity demanded is unchanged. The price elasticity of demand for fresh fish is Your answer: perfectly inelastic b perfectly elastic c inelastic d unitary elastic

Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded...

Compute the price elasticity of demand if price increases from $10 to $12 and quantity demanded falls from 600 to 400. Use the value obtained and a specific example to determine whether price must be increased or decreased to increase total revenue. Explain why. Note: Explain only how to increase total revenue, not decrease it.

Question