Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 19: Q.17 (page 435)

Consider panel (a) of Figure 19-1. Use the basic definition of the price elasticity of demand to explain why the value of the price elasticity of demand is zero for the extremely rare situation of the vertical demand curve.

Short Answer

Expert verified

The value of the price elasticity of demand is zero for the extremely rare situation of the vertical demand curve as value versatility of interest as the proportion of rate change in the amount requested to the rate change in cost.

Step by step solution

01

Given Information

Price elasticity of demand estimates how much the interest for the ware changes with one unit change in the cost of the item.

02

Explanation

Price elasticity of interest is zero infers that there is for all intents and purposes no effect of the cost change on the interest of the item. It is an entirely inelastic interest bend. Presently in the event that there is no adjustment of interest with an adjustment of value, the numerator (for example rate change in the amount requested) becomes zero. So anything, assuming that isolated by nothing, stays zero. Along with these lines, value flexibility is zero for vertical interest bend.

It occurs for exceptionally intriguing products. For instance, we can consider life-saving medications. For such meds, assuming it is required, we never ponder the cost. So regardless of whether cost increments, the request stays unaffected.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Classify supply elasticities and explain how the length of time for adjustment affects the price elasticity of supply

Based solely on the information provided below, characterize the demands for the following goods as being more elastic or more inelastic.

a. A 45-cent box of salt that you buy once a year

b. A type of high-powered ski boat that you can rent from any one of a number of rental agencies

c. A specific brand of bottled water

d. Automobile insurance in a state that requires autos to be insured but has only a few insurance companies

e. A 75-cent guitar pick for the lead guitarist of a major rock band

Is the students' supply of learning tasks relatively elastic or inelastic? Explain.

The diagram below depicts the demand curve for "miniburgers" in a nationwide fast-food market. Use the information in this diagram to answer the questions that follow.

Quantity (mini burgers per day)

a. What is the price elasticity of demand along with the range of the demand curve between a price of \(0.20per miniburger and a price of role="math" localid="1651796932841" \)0.40per miniburger? Is demand elastic or inelastic over this range?

b. What is the price elasticity of demand along with the range of the demand curve between a price of \(0.80 per miniburger and a price of \)1.20 per miniburger? Is demand elastic or inelastic over this range?

c. What is the price elasticity of demand along with the range of the demand curve between a price of \(1.60 per miniburger and a price of \)1.80 per m ? Is demand elastic or inelastic over this range?

How do you think that reducing experimental subjects" stress would have affected their price elasticity of demand for alcohol?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free