How does the number of substitutes affect the price elasticity of demand for a p

Economics
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How does the number of substitutes affect the price elasticity of demand for a product or resource?

What does a higher number of substitutes mean for the slope of the demand curve?

What does a smaller number of substitutes mean for the slope of the demand curve?

Jul 26th, 2015

Thank you for the opportunity to help you with your question!

1. How does the number of substitutes affect the price elasticity of demand for a product or resource?

The ease with which buyers can find substitutes-in-consumption affects the price elasticity of demand. The general rule is that goods with a greater availability of substitutes is more sensitive to price changes. With more substitutes available, buyers can easily respond to price changes. 

2. The more and closer the substitutes available, the higher the elasticity is likely to be, as people can easily switch from one good to another if an even minor price change is made; There is a strong substitution effect. If no close substitutes are available, the substitution effect will be small and the demand inelastic

3. On the other side of the market is the price elasticity of supply. This is the relative response of quantity supplied to changes in the price. It is also analogously specified as the percentage change in quantity supplied to a percentage change in price.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 26th, 2015

Hey, can you answer these True or False questions?

  1. The production possibilities frontier assumes that the level of technologyvaries when applying the model.

  2. 4 points  

Question 2

  1. The law of supply states that there is a negative relationship between priceand quantity demanded.

4 points  

Question 3

  1. Demand is measured on the vertical axis and supply on the horizontalaxis.

4 points  

Question 4

  1. Opportunity cost is the lowest valued benefit that must be sacrificed asthe result of choosing an alternative.

4 points  

Question 5

  1. Joint output of individuals or nations will be maximized when goods are exchanged between parties in accordance with the law of "comparative advantage".

4 points  

Question 6

  1. Excess demand in the market will cause the price of a product to decline.

4 points  

Question 7

  1. A supply curve is negatively sloped, while a demand curve is positively sloped. If given a graph of them both, that will be evidenced by computingeach curve's X axis divided by its Y axis when devising a 90-degree angle.

4 points  

Question 8

  1. A point inside the production possibilities frontier represents an economythat is utilizing resources efficiently.

4 points  

Question 9

  1. A change in quantity demanded is a movement along the same demandcurve.

4 points  

Question 10

  1. For economies that rely on decentralized decision making, the most important decisions are made by the government.

4 points  

Question 11

  1. The smaller percentage of one's net budget one has to allocate moneyto a particular product, the more price inelastic will be the demandfor that product.

4 points  

Question 12

  1. Government actions, such as price floors and ceilings, can actually reduce employment and raise market inefficiency

4 points  

Question 13

  1. In the circular flow model, firms own economic resources, and householdsbuy the manufactured products and services.

4 points  

Question 14

  1. Households play a dual role of providing the factors of production whilepurchasing the goods and services of firms.

4 points  

Question 15

  1. Equilibrium is a state of balance between supply and demand.

4 points  

Question 16

  1. In the production possibilities frontier, a nation's boundary will shift inward if they export more than they import, likely leading to inflationarypressures in the economy.

4 points  

Question 17

  1. An increase in consumer income will affect the supply of any given product.

4 points  

Question 18

  1. As globalization and world trade proliferates, individual markets withincountries' economies become more competitive.

4 points  

Question 19

  1. "As the price of gasoline rises, consumer demand decreases. In addition,the quantity demanded of compact cars increased, causing their priceto rise." This statement contains two errors: demand and quantitydemanded are confused twice.

4 points  

Question 20

  1. If the spot oil price in petroleum markets is rising, then we can expect thesupply curves of products using petroleum as an input to shift rightward.

4 points  

Question 21

  1. A substitute good is a determinant of supply.

4 points  

Question 22

  1. The law of demand states that there is a direct relationship betweensupply and demand.

4 points  

Question 23

  1. The "Law of diminishing returns" states that as any activity is extended,it eventually becomes increasingly easier to pursue the activity further.

4 points  

Question 24

  1. Antiques would tend to have highly price inelastic supply curves.

4 points  

Question 25

  1. "The big corporations in this country, like ExxonMobil and GM, havedeep pockets and need to be hiring more people." This isa positive statement about economic policy.


Jul 26th, 2015

Please post this question and i will help after paying me a downpayment

Jul 26th, 2015

ok

Jul 26th, 2015

Please inform me when done

Jul 26th, 2015

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