Independent goods are goods where if the price of one changes, it has no effect on the demand for to other one.
When a relatively large price increase has little effect on the quantity demanded the demand for the product is?
When the percentage change in quantity demanded is less than the percentage change in price, demand is price inelastic. If demand is price inelastic, a higher price increases total revenue and a lower price reduces total revenue.
When a change in price has very little effect on quantity demanded This is called what?
40 Cards in this Set
| The amount of a good or service that a consumer is wiling and able to buy at each particular price | quantity demanded |
|---|---|
| Exists when a small change in a good’s price has a large impact on the quantity demanded | elastic demand |
| When a change in price has little impact on quantity demanded | inelastic demand |
Which is an example of the elasticity of a product?
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A. a sharp increase in revenues demonstrated the elasticity of the product. B. a dramatic decline in revenues demonstrated the elasticity of the product. C. a small increase in revenues demonstrated the unit elasticity of the product.
How are revenues related to unit elasticity of product?
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C. a small increase in revenues demonstrated the unit elasticity of the product. D. a dramatic decline in revenues demonstrated the inelasticity of the product. B. a dramatic decline in revenues demonstrated the elasticity of the product.
What does a small increase in revenues demonstrate?
C. a small increase in revenues demonstrated the unit elasticity of the product. D. a dramatic decline in revenues demonstrated the inelasticity of the product. B. a dramatic decline in revenues demonstrated the elasticity of the product. Advertising, fashion trends, and new product introductions serve to…
