if a tiny increase in the price of a good reduces quantity demanded to zero, demand is ____________ and the…

if a tiny increase in the price of a good reduces quantity demanded to zero, demand is ____________ and the price elasticity of demand is\nperfectly inelastic; equal to zero.\nperfectly elastic; equal to infinity.\nunit elastic; equal to one.\nperfectly elastic; equal to zero.\nquestion 8\n1 pts\nwhen demand is unit elastic, price elasticity of demand\nequals 1, and total revenue and price move in the same direction.\nequals 1, and total revenue and price move in opposite directions.\nequals 1, and total revenue does not change when price changes.\nequals 0, and total revenue does not change when price changes.\nequals infinity, and total revenue would move in the opposite direction of the price change.

if a tiny increase in the price of a good reduces quantity demanded to zero, demand is ____________ and the price elasticity of demand is\nperfectly inelastic; equal to zero.\nperfectly elastic; equal to infinity.\nunit elastic; equal to one.\nperfectly elastic; equal to zero.\nquestion 8\n1 pts\nwhen demand is unit elastic, price elasticity of demand\nequals 1, and total revenue and price move in the same direction.\nequals 1, and total revenue and price move in opposite directions.\nequals 1, and total revenue does not change when price changes.\nequals 0, and total revenue does not change when price changes.\nequals infinity, and total revenue would move in the opposite direction of the price change.

Answer

Brief Explanations:

  1. For the first question, when a tiny price - increase reduces quantity demanded to zero, demand is perfectly elastic. The formula for price elasticity of demand is $\frac{%\text{ change in quantity demanded}}{%\text{ change in price}}$. In perfect elasticity, a small change in price leads to an infinite change in quantity demanded, so the price elasticity of demand is infinity.
  2. For the second question, when demand is unit - elastic, the price elasticity of demand equals 1. Total revenue is calculated as $P\times Q$. When demand is unit - elastic, a change in price is offset by an equal percentage change in quantity demanded in the opposite direction, so total revenue does not change when price changes.

Answer:

Question 1: B. perfectly elastic; equal to infinity. Question 2: C. equals 1, and total revenue does not change when price changes.