Description : A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to - (1) Zero (2) One (3) Less than one (4) Infinity
Last Answer : (4) Infinity Explanation: Price elasticity of demand measures consumer response to price changes. If consumers are relatively sensitive to price changes, demand is elastic: if they are relatively ... keeps changing with the price. So the coefficient of price elasticity of demand is infinity.
Description : A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to (1) Zero (2) One (3) Less than one (4) Infinity
Last Answer : Infinity
Description : In case of horizontal demand curve , price elasticity of demand is (a) equal to zero (b) equal to one © equal to two (d) infinite
Last Answer : (a) equal to zero
Description : Cross-price elasticity of demand between tea and coffee is (a) negative (b) positive © zero (d) infinite
Last Answer : (b) positive
Description : When cost of production is zero, monopoly equilibrium will be established at a level where elasticity of demand curve is : (a) Greater than one (b) Equal to one (c) Less than one (d) Infinity
Last Answer : Equal to one
Description : In price discrimination, which section of the market is charged the higherprice? a. the section with the richest people b. the section with the oldest people c. the section with the most inelastic demand d. the section with the most elastic demand
Last Answer : c. the section with the most inelastic demand
Description : Cross elasticity of demand between petrol and car is - (1) infinite (2) positive (3) zero (4) negative
Last Answer : (4) negative Explanation: In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the ... denotes two products that are complements, while a positive cross elasticity denotes two substitute products
Description : In the case of an inferior good, the income elasticity of demand is : (1) Zero (2) Negative (3) Infinite (4) Positive
Last Answer : (2) Negative Explanation: A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious ... demand is associated with normal goods; an increase in income will lead to a rise in demand.
Description : Cross elasticity of demand between two perfect substitutes will be A.low B.high C.zero D.infinity
Last Answer : D.infinity
Description : In case of Complementary goods cross elasticity of demand will be (a) Negative (b) Zero (c) Unitary (d) Infinite
Last Answer : (a) Negative
Last Answer : Negative
Description : Cross elasticity of demand between petrol and car is (1) infinite (2) positive (3) zero (4) negative
Last Answer : negative
Description : Elasticity of demand is the degree of responsiveness of demand of a commodity to a - (1) change in consumers' wealth (2) change in the price of substitutes (3) change in consumers' tastes (4) change in its price
Last Answer : (4) change in its price Explanation: The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing ... demand is the ratio of percentage change in amount demanded to a percent-age change in price.
Description : Elasticity of demand measures the responsiveness of the quantity demanded of a goods to a (1) change in the price of the goods (2) change in the price of substitutes (3) change in the price of the complements (4) change in the price of joint products
Last Answer : (1) change in the price of the goods Explanation: Price elasticity of demand is a measure of responsiveness of the quantity of a good or service demanded to changes in its price. This measure of ... good with respect to the change in the price of some other good, a complementary or substitute good.
Description : If a good has negative income elasticity and positive price elasticity of demand, it is a (1) giffen good (2) normal good (3) superior good (4) an inferior good
Last Answer : (1) giffen good Explanation: A negative income elasticity of demand is associated with inferior goods. The Giffen good is an unusual type of inferior good which has positive price elasticity of demand. It ... rises, violating the law of demand. When price goes up, the quantity demanded also goes up.
Description : A fall in demand or rise in supply of a commodity— (1) Increases the price of that commodity (2) decreases the price of that commodity (3) neutralizes the changes in the price (4) determines" the price elasticity
Last Answer : (2) decreases the price of that commodity Explanation: The four basic laws of supply and demand are: (1) If demand increases and supply remains unchanged, a shortage occurs, leading to a higher ... (4) If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher price.
Description : The price elasticity of demand is the: a. percentage change in quantity demanded divided by the percentage change in price b. percentage change in price divided by the percentage change in ... in price d. percentage change in quantity demanded divided by the percentage change in quantity supplied
Last Answer : a. percentage change in quantity demanded divided by the percentage change in price
Description : Elasticity of demand measures the A.Sensitivity of sales to changes in a particular causal factor B.Sensitivity of production to changes in a particular cost C.Value of price and cost D.Volume of product
Last Answer : A.Sensitivity of sales to changes in a particular causal factor
Description : Price elasticity of demand provides A.A measure of the responsiveness of the quantity demanded to changes in the price of the product, holding constant the values of all other variables in the demand function ... the firm C.A technical change in the cost of product D.Technical change in the value.
Last Answer : A.A measure of the responsiveness of the quantity demanded to changes in the price of the product, holding constant the values of all other variables in the demand function.
Description : Find out the price elasticity in the following example : Price Demand 5(P1) 10(Q1) 4(P2) 15(Q2) (a) – 2.5 (b) + 3.5 (c) + 4.0 (d) + 2.5
Last Answer : (a) – 2.5
Description : Price elasticity of demand shows the relationship between demand for a commodity and (a) price of other commodities (b) price of that commodity © tastes and preferences of the consumer (d) income of the consumer
Last Answer : (b) price of that commodity
Description : Elasticity of demand is the degree of responsiveness of demand of a commodity to a (1) change in consumers’ wealth (2) change in the price of substitutes (3) change in consumers’ tastes (4) change in its price
Last Answer : change in its price
Last Answer : giffen good
Last Answer : change in the price of the goods
Description : A fall in demand or rise in supply of a commodity– (1) Increases the price of that commodity (2) decreases the price of that commodity (3) neutralises the changes in the price (4) determines the price elasticity
Last Answer : decreases the price of that commodity
Description : Charge dissimilar prices in diverse markets for some product is a) Marketing mix b) Psychographic factorsc) Price discrimination d) Price skimming
Last Answer : a) Marketing mix
Description : If two commodities are complements, then their cross-price elasticity is (1) zero (2) positive (3) negative (4) imaginary number
Description : Which of the following best defines price discrimination? a. charging different prices on the basis of race b. charging different prices for goods with different costs of production c. charging ... a certain product of given quality and cost per unit at different prices to different buyers
Last Answer : d. selling a certain product of given quality and cost per unit at different prices to different buyers
Description : If the supply curve is a straight line passing through the origin, then the price elasticity of supply will be - (1) less than unity (2) infinitely large (3) greater than unity (4) equal to unity
Last Answer : (4) equal to unity Explanation: Any straight line supply curve passing through the origin has an elasticity of supply equal to 1. The different types of price elasticity of supply are listed below:
Description : If the supply curve is a straight line passing through the origin, then the price elasticity of supply will be (1) less than unity (2) infinitely large (3) greater than unity (4) equal to unity
Last Answer : equal to unity
Description : Supply curve passing through any point on Y axis(Price) will have elasticity (a) Less than 1 ; (b) More than 1 ; (c) Just One ; (d) Zero
Last Answer : (b) More than 1
Description : A horizontal demand curve is - (1) relatively elastic (2) perfectly inelastic (3) perfectly elastic (4) of unitary elasticity
Last Answer : (3) perfectly elastic Explanation: The demand curve facing a perfectly competitive firm is flat or horizontal. This is because all firms in perfect competition are by definition selling an identical (homogeneous) ... of the curve is zero, it is impossible for the price to change in the market.
Description : The income elasticity of demand being greater than one, the commodity must be - (1) a necessity (2) a luxury (3) an inferior good (4) None of these
Last Answer : (2) a luxury Explanation: In economics, income elasticity of demand measures the responsiveness of the demand for a good to a change in the income of the people demanding the good, ceteris paribus. It is ... If the elasticity of demand is greater than 1, it is a luxury good or a superior good.
Description : If the main objective of the government is to raise revenue, it should tax commodities with (1) high elasticity of demand (2) low elasticity of supply (3) low elasticity of demand (4) high income elasticity of demand
Last Answer : (3) low elasticity of demand Explanation: The Ramsey rule states that commodities with low elasticities of demand should be taxed at higher rates than commodities with high elasticities of demand. ... the Ramsey rule may result in a regressive taxation scheme society may view as inequitable.
Description : The relationship between elasticity of demand (e), Average Revenue (AR) and Marginal Revenue (MR) is shown by which of the following formula ? (a) e = MR / (AR – MR) (b) e = AR/MR (c) e = MR/AR (d) e = AR / (AR – MR)
Last Answer : (d) e = AR / (AR – MR)
Description : If elasticity of demand is perfectly inelastic, then burden of tax will be on (a) Buyer (b) Seller (c) on both (a) and (b) (d) More on seller
Last Answer : (a) Buyer
Description : Total revenue is maximum when elasticity of demand is (a) 3 (b) 1 © 0 (d) 0.5
Last Answer : (b) 1
Description : A horizontal demand curve is (1) ralatively elastic (2) perfectly inelastic (3) perfectly elastic (4) of unitary elasticity
Last Answer : perfectly elastic
Last Answer : low elasticity of demand
Description : The income elasticity of demand being greater than one, the commodity must be (1) a necessity (2) a luxury (3) an inferior good (4) None of these
Last Answer : a luxury
Description : Dumping is a form of price discrimination at - (1) within industry (2) national level (3) international level (4) local level
Last Answer : (3) international level Explanation: Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price ... trade practice as it may cause or threat en to cause material injury to the importing markets.
Description : One of the essential conditions of Monopolistic competition is - (1) Many buyers but one seller (2) Price discrimination (3) Product differentiation (4) Homogeneous product
Last Answer : (3) Product differentiation Explanation: Monopolistic competition is a type of imperfect competition such that many producers sell products that are differentiated from one another as goods but not ... the market becomes more like a perfectly competitive one where firms cannot gain economic profit.
Description : . In order to practice price discrimination, which of the following is needed? a. some degree of monopoly power b. an ability to separate the market c. an ability to prevent reselling d. all of the above
Last Answer : d. all of the above
Description : Dumping is a form of price discrimination at (1) within industry (2) national level (3) international level (4) local level
Last Answer : international level
Description : One of the essential conditions of Monopolistic competition is (1) Many buyers but one seller (2) Price discrimination (3) Product differentiation (4) Homogeneous product
Last Answer : Product differentiation
Description : The Diamond Model assumes that: a) Multinational firms must develop global strategies based only on home demand conditions. b) Multinational firms must pay less attention to global consumers than domestic ... a firm plays a key role in shaping that firm's competitive advantage in global markets.
Last Answer : The national home base of a firm plays a key role in shaping that firm's competitive advantage in global markets.
Description : If two commodities are complements, then their crossprice elasticity is- (1) zero (2) positive (3) negative (4) imaginary number
Last Answer : (4) imaginary number Explanation: In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in ... denotes two products that are complements, while a positive cross elasticity denotes two substitute products.
Description : At elasticity of one, marginal revenue is equal to A.one B.zero C.infinity D.none
Last Answer : B.zero
Description : nelastic demand in industrial markets refers to a situation where A)demand for a given product fluctuates very little over time. B)price increases or decreases will not significantly alter demand for a ... for another product. E)supply for a given product cannot keep up with the demand for it.
Last Answer : )price increases or decreases will not significantly alter demand for a given product.
Description : Regulated markets aim at the development of the marketing structure to - (1) widen the price spread between the producer and the consumer (2) narrow down the price spread between the producer ... non-functional margins of the traders (4) maximize the non-functional margins of the commission agents
Last Answer : (2) narrow down the price spread between the producer and the consumer Explanation: Regulated markets aim at the development of marketing structures to ensure remunerative prices to the producers and to ... the consumer. It also aims at reducing the non-functional margins of the commission agents.