Section 1 - Instruction

Quick review: Elasticity tells us how much quantity demanded responds to a price change. The total revenue test is a great shortcut: if price and total revenue move in opposite directions, demand is elastic. If they move in the same direction, it's inelastic.

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Section 2 - Practice

Type

Multiple Choice

Practice Question

A local bookstore raises the price of a popular novel from 15to15 to 17. Its total weekly revenue from that book falls from 3000to3000 to 2890. The demand for this novel is:

A. Elastic B. Inelastic C. Unit elastic D. Perfectly inelastic

Suggested Answers

  • A - Correct
  • B
  • C
  • D
Section 3 - Practice

Type

Fill In The Blanks

Markdown With Blanks

Let's practice interpreting elasticity values. Fill in the blanks.

If a 10% increase in the price of streaming services leads to a 20% decrease in subscribers, the price elasticity of demand is [[blank:2.0]]. This means demand is [[blank:elastic]].

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