Macmillan Learning Determine whether each of the statements given is true or false. Truc Answer Bank When supply is perfectly inelastic, a change in demand has no effect on the price. A key consideration as to whether the price elasticity of supply is elastic or inelastic is whether the good supplied is a luxury item. False The short-run elasticity of supply is larger than the long-run elasticity of supply because changes in equilibrium will adjust elasticity accordingly. When the price increases, total revenue always increases because of the price effect. A Swiffer floor sweeper and a broom would have a positive cross-price elasticity of demand.

If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?

If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?

The equation for a demand curve is P=483Q. What is the elasticity in moving from quantity of 5 to a quantity of 6?

The price of coffee rose sharply last month, while the quantity sold remained the same. Five people suggest various explanations: Leonard: Demand increased, but supply was perfectly inelastic. Sheldon: Demand increased, but it was perfectly inelastic. Penny: Demand increased, but supply decreased at the same time. Howard: Supply decreased, but demand was unit elastic. Raj: Supply decreased, but demand was perfectly inelastic. Who could possibly be right? Use graphs to explain your answer.

The equation for a demand curve is P=2/Q. What is the elasticity of demand as price falls from 5 to 4? What is the elasticity of demand as the price falls from 9 to 8? Would you expect these answers to be the same?

If demand is inelastic, will shifts in supply have a larger effect on equilibrium price or on quantity?

What is the price elasticity of demand? Can you explain it in your own words?

The avenge annual income rises from 25,000 to 33,000, and the quantity of bleed consumed in a year by the avenge person falls from 30 loaves to 22 loaves. What is the income elasticity of bread consumption? Is bread a normal or an inferior good?

Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3. What will happen to the demand for apples?