Asked by
Mohammad Easir
on Dec 11, 2024
Verified
If a 10 percent rise in airfares leads to a 5 percent increase in total expenditures on air travel, the price elasticity of demand for air travel in this range must be
A) 2.
B) elastic.
C) 0.5.
D) inelastic.
Price Elasticity of Demand
A measure of how much the quantity demanded of a good changes in response to a change in its price.
Total Expenditures
The sum of all spending or costs incurred by an individual, firm, or government.
- Learn about the concept of price elasticity of demand and acquire skills for its precise calculation.
- Define the distinct characteristics separating elastic, inelastic, and unit elasticity of demand.
Verified Answer
KL
Learning Objectives
- Learn about the concept of price elasticity of demand and acquire skills for its precise calculation.
- Define the distinct characteristics separating elastic, inelastic, and unit elasticity of demand.