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 per- fectly 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 per- fectly inelastic.

Elastic, inelastic, and unit-elastic demand The following graph shows the demand for a good.     For each region on the graph given in the following table, use the elasticity formula to identify whether the demand for this good is elastic, (approximately) unit elastic, or inelastic.

In a study of the demand for automobiles in Canada, economists Blomqvist and Hassel distinguished between large and small cars and estimated the price and cross- price elasticities as well as the effects of the price of gasoline on the demands for small and large cars. Their results were as follows: a. C. New large cars New small cars d. Own price elasticity 1.26 2.30 Cross price elasticity 0.86 1.73 Elasticity with respect to gasoline price Note: The cross-price elasticities show that the demand for new small cars is more responsive to changes in the price of new large cars than the demand for new large cars is to changes in the price of new small cars. Do the cross-price elasticities have the expected sign? Briefly explain. b. If the price of new small cars went up by, say, 5 percent, by what percentage would new small car purchases change? {Note: In your answer to this and all of the remaining parts of this question, please indicate whether the change is an increase or a decrease.}…

Use the price-demand equation to determine whether demand is elastic, inelastic, or has unit elasticity at the indicated value of p. x = f(p) = 48,000 - 40p², p=21 Is the demand inelastic, elastic, or unit? Choose the correct answer below. Unit Elastic O Inelastic ...