For questions 1-18, the answer is either PRICE ELASTIC, PRICE INELASTIC, or UNITARY ELASTIC

  1. If a decrease in the price of a product increases total revenue for the business, then demand is:
  2. If anincrease in the price of a product increases total revenue for the business, then demand is:
  3. If a decrease or an increase in the price of a product has no affect on total revenue for the business, then demand is:
  4. If the percentage change in quantity demanded of a product is less than the percentage change in price, then demand is:
  5. If the percentage change in quantity demanded of a product is more than the percentage change in price, then demand is:
  6. If the percentage change in quantity demanded of a product equals the percentage change in price, then demand is:
  7. One product’s price elasticity of demand is .5 and another product’s is 1.5. The first product is more _____ than the second.
  1. The demand curve between points a and b is:
  1. The demand curve between points b and c is:
  1. If you want to increase total revenue for your business, you should raise the price of your product if demand for the product is:
  2. If you want to increase total revenue for your business, you should lower the price of your product if demand for the product is:
  3. Price elasticity will be greater than 1 if demand for the product is:
  4. Price elasticity will be 1 if demand for the product is:
  5. Price elasticity will be less than 1 if demand for the product is:
  6. If price is cut 10% and sales increase by 20%, demand is:
  7. If price is cut 20% and sales increase by 10%, demand is:
  8. If price is cut 10% and sales increase by 10%, demand is:
  9. If Herbert, the hair stylist, raises the price of his cuts from $13 to $15 and finds the number of cuts falls from 300 to 260, then the demand for Herbert's cuts in this range is:
  10. Calculate the price elasticity of demand for the previous problem using the formula presented in class.
  11. If price elasticity of demand is .5, what price change could be made to increase revenue?
  12. If price elasticity of demand is 1.5, what price change could be made to increase revenue?
  13. If price elasticity of demand is 1, what price change could be made to increase revenue?
  14. Why do business’s want to know the price elasticity of demand for their products?
  1. In the exhibit, what is total revenue at a price of $10 per ticket?
  1. Why is long-run price elasticity of demand usually larger than short-run price elasticity of demand?
  2. Will the price elasticity of demand coefficient be smaller or larger if close substitutes exist?
  3. Which product is likely to have the most elastic demand curve: chewing tobacco, dental care, Harley motorcycles, water service?