Demand Changes in Demand Demand elasticity describes how sensitive quantity demanded is to a change in price Demand is thought to be elastic (stretchy) when a change in price causes a relatively larger change in is thoug demanded. Demand is inelastic (not stretchy) when a change in price causes a relatively smaller change in quantity demanded. If consumers cannot postpone the purchase of a product, or find a suitable substitute, it is inelastic. Purchases that require a large portion of income are generally more elastic than the demand for purchases that require a smaller amount of income, or if there are many substitutes for a product then demand is also elastic. An increase in the price of a Rolex or designer purse demonstrates a more elastic demand because an upward change in a luxury item's price point will reduce the demand for those items. Alternatively, a product's inelastic price might become more elastic if there are viable substitutes on the market.Items like diapers, milk baby formula, and gasoline are examples of inelastic demand by nature of them being necessities , thus demand will remain near constant despite changes in price. Fill in the Blank:Fill in the blank with the correct words. 1. Demand is thought to be when a change in price causes a relatively change in quantity demanded. 2. Purchases that require a large portion of income are generally more than the demand for purchases that require a smaller amount of income. 3. A product's price might become if there are viable substitutes on the market. 4. Items like diapers, milk baby formula, and gasoline are examples of demand by nature of them being 5. To measure the elasticity of demand, compare the percentage change in quantity demanded to the percentage change in __ Word bank: elastic, larger, inelastic, more smaller, expenditures necessities, price fultiple Choice Questions Choose the correct answer from the choices for each question. 1. Which of the following best describes elastic demand? a) A relatively smaller change in quantity demanded for a change in price b) A relatively larger change in quantity demanded for a change in price c) No change in quantity demanded for a change in price d) All of the above 2. What characteristic of a product typically leads to inelastic demand? a) The product has many substitutes b) The product requires a large portion of the consumer's income

Question

Demand Changes in Demand Demand elasticity describes how sensitive quantity demanded is to a change in price Demand is thought to be elastic (stretchy) when a change in price causes a relatively larger change in is thoug demanded. Demand is inelastic (not stretchy) when a change in price causes a relatively smaller change in quantity demanded. If consumers cannot postpone the purchase of a product, or find a suitable substitute, it is inelastic. Purchases that require a large portion of income are generally more elastic than the demand for purchases that require a smaller amount of income, or if there are many substitutes for a product then demand is also elastic. An increase in the price of a Rolex or designer purse demonstrates a more elastic demand because an upward change in a luxury item's price point will reduce the demand for those items. Alternatively, a product's inelastic price might become more elastic if there are viable substitutes on the market.Items like diapers, milk baby formula, and gasoline are examples of inelastic demand by nature of them being necessities , thus demand will remain near constant despite changes in price. Fill in the Blank:Fill in the blank with the correct words. 1. Demand is thought to be when a change in price causes a relatively change in quantity demanded. 2. Purchases that require a large portion of income are generally more than the demand for purchases that require a smaller amount of income. 3. A product's price might become if there are viable substitutes on the market. 4. Items like diapers, milk baby formula, and gasoline are examples of demand by nature of them being 5. To measure the elasticity of demand, compare the percentage change in quantity demanded to the percentage change in __ Word bank: elastic, larger, inelastic, more smaller, expenditures necessities, price fultiple Choice Questions Choose the correct answer from the choices for each question. 1. Which of the following best describes elastic demand? a) A relatively smaller change in quantity demanded for a change in price b) A relatively larger change in quantity demanded for a change in price c) No change in quantity demanded for a change in price d) All of the above 2. What characteristic of a product typically leads to inelastic demand? a) The product has many substitutes b) The product requires a large portion of the consumer's income

Answer 1

**Fill in the Blank:**1. Demand is thought to be **elastic** when a change in price causes a relatively **larger** change in quantity demanded.2. Purchases that require a large portion of income are generally more **elastic** than the demand for purchases that require a smaller amount of income.3. A product's **inelastic** price might become **elastic** if there are viable substitutes on the market.4. Items like diapers, milk, baby formula, and gasoline are examples of **inelastic** demand by nature of them being **necessities**.5. To measure the elasticity of demand, compare the percentage change in quantity demanded to the percentage change in **price**.**Multiple Choice Questions:**1. Which of the following best describes elastic demand? - b) A relatively larger change in quantity demanded for a change in price2. What characteristic of a product typically leads to inelastic demand? - c) The product is a necessity

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