Anonymous
Anonymous asked in Social ScienceEconomics · 1 decade ago

economic -price inelastic?

If the demand for a product is price inelastic,

a. a small change in price will cause a large shift in the demand curve

b. a large change in price will cause a small shift in the demand curve

c. producers' revenues will increase if supply decreases

d. a small change in price will cause a small shift in the demand curve

e. producers' revenues will increase if supply increases

3 Answers

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  • 1 decade ago
    Favorite Answer

    Among the answers, the most suitable answer is (b). However, it is adviseable to note the following for your consideration.

    1. Answers (c) and (e) are related to producers, and the inelastic demand cannot help to increase or decrease a large amount of revenue of producers.

    2. Slope of the demand curve is a component of elasticity. Note that the answers (a), (b), and (d) are really attempt to explain the slope of the demand curve, not the elasticity. Therefore the answer (b), for example, should be as "a large percentage change in price will cause a small percentage shift of quantity in the demand curve".

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  • 1 decade ago

    b. a large change in price will cause a small shift in the demand curve

    If demand is price inelastic, people will continue to buy it even if the price goes up. An example we have all become familiar with is gasoline prices.

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  • Amy
    Lv 4
    4 years ago

    Wrong on so many levels. In a slump people direct their limited means to necessities. Yoga is not such a thing. What you are looking at is elasticity of demand, which is elastic. My memory fails me for more detail but it is mind boggling to me what people now consider necessities.

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