The price elasticity of demand measures by what percent the quantity demanded will change following a 1% price increase.
<h3>What is the price elasticity of demand?</h3>
The price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
For example if price increases by 10% and quantity demanded decreases by 20%, the price elasticity of demand would be 2.
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Answer: Trade Sanctions and embargoes
Explanation:
Trade sanctions refers to trade penalties imposed by one country on another country. The aim of imposing trade sanctions is to make trading difficult for the country bearing the sanctions to trade with the country imposing the sanction. For instance, if China impose trade sanction on Nigeria, it will be difficult or almost impossible for Nigeria to trade with China.
Trade sanction is a kind of punishment to the country it is imposed on.
Embargo on the other hand is also a trade sanction in which the government of a particular country orders that trade should be restricted with a specific country or exchange of a specific commodity.
Trade sanction and embargo are designed to isolate a country and create difficulties in trading with the country imposing the sanction.
Answer:
A) $3,612.50
Explanation:
There are 85 (= 100 - 15) customers willing to purchase concert tickets that will have some consumer surplus. The first 14 will not purchase the tickets since they value the concert less than $15 and the customer that values the concert at $15 wouldn't have any consumer surplus.
Consumer surplus is the difference between the amount of money a consumer is willing to pay for a good or service, and the actual price of the good or service. In this case consumer surplus goes from $1 to $85. Average consumer surplus = 1/2 x $85
We can calculate it by drawing a graph or by using the following equation:
average consumer surplus x number of consumers = (1/2 x $85) x (100 - 15) = $3,612.50