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Can you explain the answer of this question below:
The price of hot-dogs increases by 22% and the quantity demanded falls by 25% this indicates that demand for hot dogs is:
- A:Elastic
- B:Inelastic
- C:Unitary elastic
- D:Perfectly elastic
The answer is a.
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Can you explain the answer of this question below:The price of hot-dog...
According to relatively elastic demand, an increase in price will lead to greater than proportionate change in quantity demanded. In this case price increases by 22% and quantity demanded falls by 25% which is greater than 22% (increase in price) so the ans is elastic.
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Can you explain the answer of this question below:The price of hot-dog...
Explanation:
Elastic demand:
Inelastic demand:
Unitary elastic:
Perfectly elastic:
Application to the given scenario:
Conclusion:
When there is a change in the price of a good or service, it affects the quantity demanded of that good or service. The degree to which the quantity demanded changes in response to a change in price is known as price elasticity of demand.
Elastic demand:
If the percentage change in quantity demanded is greater than the percentage change in price, the good or service is said to have elastic demand. This means that consumers are sensitive to changes in price and will reduce their quantity demanded significantly when prices increase.
Inelastic demand:
If the percentage change in quantity demanded is less than the percentage change in price, the good or service is said to have inelastic demand. This means that consumers are relatively insensitive to changes in price and will continue to buy the same quantity even if prices increase.
Unitary elastic:
If the percentage change in quantity demanded is equal to the percentage change in price, the good or service is said to have unitary elastic demand.
Perfectly elastic:
If the quantity demanded changes infinitely in response to any change in price, the good or service is said to have perfectly elastic demand.
Application to the given scenario:
In this scenario, the price of hot dogs has increased by 22%. As a result, the quantity demanded has fallen by 25%. This indicates that hot dogs have elastic demand because the percentage change in quantity demanded is greater than the percentage change in price. Consumers are sensitive to changes in price and will reduce their quantity demanded significantly when prices increase.
Conclusion:
Therefore, the demand for hot dogs is elastic.
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Can you explain the answer of this question below:The price of hot-dog...
According to relatively elastic demand, an increase in price will lead to greater than proportionate change in quantity demanded. in this case price increases by 22% and qty demanded falls by 25% which is greater than 22% (increase in price) so the ans is elastic.
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Can you explain the answer of this question below:The price of hot-dogs increases by 22% and the quantity demanded falls by 25% this indicates that demand for hot dogs is:A:ElasticB:InelasticC:Unitary elasticD:Perfectly elasticThe answer is a.
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