The value of PES can help producers to determine whether they should raise price or lower price to gain higher total revenue.
The income elasticity of demand can indicate if a good is a necessity or a luxury.
If the value of cross price elasticity of two goods is negative, the two goods are complement.
If a one of a kind（独一无二） antique is offered at an auction, the supply curve for the antique is vertical.
If PED of good X is relatively inelastic, the firm should expand output to increase profits.
The value of PED decreases when
the good has more substitutes
the goods becomes a luxury
consumers spend greater portion of their budget on the good
the good must be purchased immediately
the price of input used to produce the good increases
Which of the following will tend to make the demand for a product less inelastic?
The product is necessary for use with a complement
Production of cost increases
New firms producing similar products enter the instury
Xiao Zhan with huge amount of fans cancelled the endorsement for the product
The product is produced with patent.
If a technological improvement in the production of AI robot and robot companies earn more revenue than before. Which of the following is true?
PES is relatively elastic
PES is relatively inelastic
PED is relatively elastic
PED is relatively inelastic
There is no right answer above.
If the supply for product X (inferior good) is perfectly elastic and the income of consumers rises, which of the following will occur?
Market price will increase
Market price will decrease
Total revenue will increase
Total revenue will remain the same
Total revenue will decrease
If a 10% increase in the price of good Y results in a 20% decrease in the Qd of good X, which of the following is true?
XED is -0.5, they are complements.
XED is +2, they are substitutes.
XED is +2, they are normal good.
XED is -2, they are substitutes.
The is no right answer above.
The cross price elasticity of demand between good J and K is -3. A 20% decrease in the price of good K, will result in a
3% decrease in the Qd of good K
60% decrease in the Qd of good K
6% increase in the Qd of good J
6% decrease in the Qd of good J
60% increase in the Qd of good J
Assume the income elasticity of demand for good Z is -5, which of the following is true?
Good Z is normal good
Good Z must have an inelastic demand,
An increase in income will lead to a decrease in demand
An increase in income will lead to a increase in demand
the income effect will reinforce the substitution effect.
The price of orange increase by 20%, resulted in 10% increase in the quantity of apple juice. The cross elasticity of demand between orange and apple juice is
0
0.5
1
2
inderterminate