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Why is the demand curve not representative of price elasticity?
price elasticities are always negative hence brings ambiguities in the demand curve
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
What is the relationship between income elasticity of demand and inferior goods?
The income elasticity of demand measures how sensitive the quantity demanded of a good is to changes in income. For inferior goods, the income elasticity of demand is negative, meaning that as income increases, the demand for inferior goods decreases.
Is the income elasticity of demand different for normal and inferior goods?
Yes, the income elasticity of demand is different for normal and inferior goods. Normal goods have a positive income elasticity of demand, meaning that as income increases, the demand for these goods also increases. In contrast, inferior goods have a negative income elasticity of demand, indicating that as income rises, the demand for these goods decreases.
What do positive and negative cross elasticity indicate?
the demand for good A and the demand for good B are both price elastic
After computing a elasticity demand and it result was negative what does it implies in economic?
The price elasticity of demand should be negative. This is because the relationship between demand and price, according to the law of demand, is negative.
Why is the demand curve not representative of price elasticity?
price elasticities are always negative hence brings ambiguities in the demand curve
The price elasticity of demand is the ratio of the?
Change in the demand for a goods and the change in its price. The ratio is negative but the negative sign is usually dropped.
What is the relationship between price elasticity of demand and the monopolist's revenue?
marginal revenue is negative where demand is inelastic
What is the relationship between income elasticity of demand and inferior goods?
The income elasticity of demand measures how sensitive the quantity demanded of a good is to changes in income. For inferior goods, the income elasticity of demand is negative, meaning that as income increases, the demand for inferior goods decreases.
Is the income elasticity of demand different for normal and inferior goods?
Yes, the income elasticity of demand is different for normal and inferior goods. Normal goods have a positive income elasticity of demand, meaning that as income increases, the demand for these goods also increases. In contrast, inferior goods have a negative income elasticity of demand, indicating that as income rises, the demand for these goods decreases.
What do positive and negative cross elasticity indicate?
the demand for good A and the demand for good B are both price elastic
What is the relationship between income elasticity and inferior goods?
Income elasticity measures how the demand for a good changes in response to changes in income. Inferior goods have a negative income elasticity, meaning demand decreases as income increases.
What are two items with negative income elasticity of demand?
Margarine has a measured IED of -0.37.
What are the 3 types of elasticity?
1)price elasticity of demand 2)income elasticity of demand 3)cross elasticity of demand
If the income elasticity of demand for a product is -0.5 then?
Income Elasticity:Income Elasticity of Demand is measure of percentage change in demand for a commodity due to 1% change in income of consumers. Negative Income Elasticity :Increase in Income of consumers lead to decrease in the quantity demanded for a commodity.Example: unbranded items.so if Income Elasticity for product is -0.5 then its demand will be decreases as Income of consumers increases.
If the elasticity of demand is equal to one then the demand is?
Unitary elasticity is when the price elasticity of demand is exactly equal to one.
