Price Elasticity and Market Demand Quiz
Test your understanding of price elasticity with 4 questions covering concepts like elastic and inelastic demand, determinants, and more!
#1
Which of the following describes price elasticity of demand?
The percentage change in quantity demanded divided by the percentage change in price.
The absolute change in quantity demanded divided by the absolute change in price.
The total revenue divided by the quantity demanded.
The total revenue divided by the price.
#2
If a product has a price elasticity of demand equal to 0.5, it means that:
A 1% increase in price leads to a 0.5% increase in quantity demanded.
A 1% increase in price leads to a 0.5% decrease in quantity demanded.
A 1% decrease in price leads to a 0.5% increase in quantity demanded.
A 1% decrease in price leads to a 0.5% decrease in quantity demanded.
#3
Which of the following goods is likely to have the most elastic demand?
Salt
Gasoline
Insulin
Luxury cars
#4
What happens to total revenue when the price of a product with elastic demand is increased?
Total revenue increases
Total revenue decreases
Total revenue remains constant
It depends on the income elasticity of demand
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