Does the fact that the price elasticity for food is inelastic violate the law of demand?
What will be an ideal response?
No, if the demand for a good is inelastic, when the price falls, the quantity demanded increases, but by a smaller percentage than the percentage fall in price. Thus the negative relationship between the price and the quantity demanded remains, and the demand curve still slopes downward, which is the law of demand.
You might also like to view...
The overall regression F-statistic tests the null hypothesis that
A) all slope coefficients are zero. B) all slope coefficients and the intercept are zero. C) the intercept in the regression and at least one, but not all, of the slope coefficients is zero. D) the slope coefficient of the variable of interest is zero, but that the other slope coefficients are not.
If this game is played once, then
a. Firm A will charge a lower price and firm B will charge a lower price b. Firm A will charge a higher price and firm B will charge a lower price c. Firm A will charge a lower price and firm B will charge a higher price d. Firm A will charge a higher price and firm B will charge a higher price
Suppose that Melinda goes to the movies 6 times per month when the price is $14 and 4 times per month when the price is $20. What is the price elasticity of Melinda’s demand curve?
a. 0.02 b. 0.2 c. 1.33 d. 10.0
Price discrimination leads to higher prices for all consumers.
Answer the following statement true (T) or false (F)