Assume the demand for plastic surgery is price inelastic Are

Assume the demand for plastic surgery is price inelastic. Are the following statements true of false? Provide a detailed discussion of why the answer is either true or false.

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.

Solution

The inelasticity of denand means as the price changes, the qty of demand does not change to a great extent.

So, if the price is increased manyfold, the demand will be more or less stable.

a. This is false as people would keep on demanding the plastic surgery.

B. Flase.

This follows from the inelastic part. Change in price is more than than change in qty demanded.

C. True .This is what inelastic demand means.

D .false. this would be true if the demand is elastic to price changes.

E .false. if the demand is inelastic the TE will remain the same.

F. False. Total revenue will be the same.