MBA 701 EXAM 2 2025/2026 QUESTIONS
AND ANSWERS 100% PASS
Price elasticity of demand = % change in Qty demanded / % change in price
X = 12% / -4% = -3 - ANS If the price decrease by 4%. As a result, the quantity demanded
increases by 12%. The price elasticity of demand is
If demand for a good is inelastic (the price elasticity of demand is less than 1), an increase in
price increases total revenue. - ANS What is the relationship between elasticity and revenue?
Equal to 1 - ANS At a 7% reduction in the price of a product has zero effect on the dollar
amount of consumer expenditure on the product. The price elasticity of demand is:
buyer responsiveness to price changes. - ANS What does the price elasticity of demand
coefficient measure
An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating
a high responsiveness to changes in price. An inelastic demand or inelastic supply is one in
which elasticity is less than one, indicating low responsiveness to price changes. - ANS What
is the characteristic of the demand for a commodity that is elastic or inelastic or unit elastic?
- ANS What is unit elastic? When the price of a good goes up and demand is unit elastic,
what would happen to the total revenue?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
AND ANSWERS 100% PASS
Price elasticity of demand = % change in Qty demanded / % change in price
X = 12% / -4% = -3 - ANS If the price decrease by 4%. As a result, the quantity demanded
increases by 12%. The price elasticity of demand is
If demand for a good is inelastic (the price elasticity of demand is less than 1), an increase in
price increases total revenue. - ANS What is the relationship between elasticity and revenue?
Equal to 1 - ANS At a 7% reduction in the price of a product has zero effect on the dollar
amount of consumer expenditure on the product. The price elasticity of demand is:
buyer responsiveness to price changes. - ANS What does the price elasticity of demand
coefficient measure
An elastic demand or elastic supply is one in which the elasticity is greater than one, indicating
a high responsiveness to changes in price. An inelastic demand or inelastic supply is one in
which elasticity is less than one, indicating low responsiveness to price changes. - ANS What
is the characteristic of the demand for a commodity that is elastic or inelastic or unit elastic?
- ANS What is unit elastic? When the price of a good goes up and demand is unit elastic,
what would happen to the total revenue?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
