Elasticity of Demand

How will the quantity demanded of good X change if at initial price of Rs 20, quantity demanded is 40 units and price rises to Rs 40? Given, absolute price elasticity of demand (e_p) is equal to 0.50.

For a downward sloping demand curve, the absolute value of its slope can be ___________ or ____________.

When there is no change in the demand of a commodity as a result of a change in its price, the demand is known as _____ (relatively elastic / perfectly inelastic)

Goods or products that have very close substitutes are said to have _____. (inelastic demand / elastic demand)

_____ demand situations persists when a proportionate change in the demand for a product is less than that of the proportionate change in the price. (relatively elastic / relatively inelastic)

An equation $xy = c$ denotes that $x$and $y$ are variables wherein $c$ is constant thus forming a curve known as _____. (downward sloping curve / rectangular hyperbola)

Name the measure of the responsiveness of demand for a commodity to a change in its corresponding price.

Suppose there was a 4 % decrease in the price of a good, and as a result, the expenditure on the good increased by 2 %. What can you say about the elasticity of demand?

Suppose the price elasticity of demand for a good is –0.2. How will the expenditure on the good be affected if there is a 10 % increase in the price of the good?

Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.

Explain price elasticity of demand.

What do you mean by substitutes? Give examples of two goods which are substitutes of each other.

What do you mean by an ‘inferior good’? Give some examples.

What do you mean by ‘monotonic preferences’?