At a specific point on the demand curve for backpacks, the elasticity of demand is calculated to be -1.6.
a. At that point, we would describe demand as ____.
b. If the price of backpacks fell by 10%, the quantity demanded would rise by and revenue for the backpack industry would .
c. If the price of backpacks rose by 20% the quantity demanded would fall by _ and revenue for the backpack industry would ____.

Question

21-06-2021
Business

contestada

At a specific point on the demand curve for backpacks, the elasticity of demand is calculated to be -1.6.
a. At that point, we would describe demand as ____.
b. If the price of backpacks fell by 10%, the quantity demanded would rise by and revenue for the backpack industry would .
c. If the price of backpacks rose by 20% the quantity demanded would fall by _ and revenue for the backpack industry would ____.

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ewomazinoade ewomazinoade · Answer 1 · 2021-06-21T20:48:03+02:00

Answer:

elastic

16%

32%

decrease

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.

Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases

Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.