What is the price elasticity of demand?

Mar 3rd, 2015
Price: $5 USD

Question description

The demand curve for bus rides is a downward sloping straight line. The price elasticity of demand for bus rides would:

A. Decrease as the price of bus ride falls,

B. is constant as the price of a bus ride rises or falls

C. decreases as the price of a bus ride rises

D. increases as the price of a bus ride falls


Cassandra's demand for orange juice is price elastic. But a severe frost destroys much of the Florida orange crop. Cassandra ____________. 

A. Continues to spend the same amount of orange juice

B. decreases the amount that she spends on orange juice

C. Increases or decreases the amount that she spends on orange juice, depending or whether or not the grapefruit crop has also been affected

D. increases the amount that she spends on orange juice

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