Assume the demand for plastic surgery is price inelastic. Are the following statements true or false? Explain.
a. when the price of plastic surgery increases, the number of operations decreases.
b. the percentage change in the price of plastic surgery is less than the percentage change in quantity demanded.
c. changes in the price of plastic surgery do not effect the number of operations
d. quantity demanded is quite responsive to changes in price
e. if more plastic surgery is performed, expenditures on plastic surgery will decrease.
f. the marginal revenue of another operation is negative.
Elasticity measure the change in demand in response to price. It is essentially the slope of the demand curve. As the price of a good rises, consumers will generally demand less of that good, either by consuming less or substituting other goods. The greater the extent to which demand falls as price rises, the greater is the price elasticity of demand. When the demand for a good is price inelastic, however, consumers find it difficult to decrease ...