Practice prompt · Q:economics-and-market-foundations/interpret-demand-elasticity-001

Interpret demand elasticity without inventing sales

Uses sign, magnitude, and the conditional endpoint product while preserving transaction and decision boundaries.

Updated Aug 7, 2026 Review due Nov 7, 2026

Practice

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On one fixed weekly demand line, price rises from $50 to $70 and quantity demanded falls from 900 to 700. Which conclusion is strongest?

Choose the best answer. a Signed elasticity is -0.75 and magnitude is inelastic; price-times-modeled-quantity rises from $45,000 to $49,000 only if those quantities sell under unchanged conditions, so profit and a pricing recommendation remain open. b Because -0.75 is less than zero, demand is elastic and the seller should always raise price. c $49,000 is recognized revenue because quantity demanded is a completed sale.

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Answer: a

Choice a. Report signed -0.75, magnitude 0.75, and the bounded $4,000 endpoint-product increase without upgrading it to sales, profit, or advice.