1. Explain whether thestatement is True, False or Uncertain. Includediagrams where appropriate. If thesupply is perfectly inelastic,...
Question:
1. Explain whether thestatement is True, False or Uncertain. Includediagrams where appropriate.
If thesupply is perfectly inelastic, then a shift in the demandcurve does not affect the equilibrium price.
2. Consider the market for bicycles. The demand is given by P= -1.5QD+ 60.Suppose that the price changes from $15 to $30.
Calculate the price elasticity of demand. Is it elastic or inelastic? Show all your work.
3. Consider the market for bicycles.The demand is given by P= -1.5QD+ 60.Suppose that the price changes from $15 to $30.
How istotal revenue affected by the change in price? Show all your work.
4. Consider the market for bicycles.The demand is given by P= -1.5QD+ 60.Suppose that the price changes from $15 to $30.
What additional information would you need to consider if you wanted to understand the relationship between scooters and bicycles?