When a textbook is mandated and students have no alternatives, the demand becomes inelastic. Students are required to purchase the book irrespective of price changes, as they need it for their course. This lack of substitutes or alternatives removes the typical reactions to price increases, making demand inelastic because students have to bear any cost imposed for the textbook .

When demand is more elastic than supply, consumers bear a smaller share of the per-unit tax. Here, the elasticity of demand determines the consumers' responsiveness to price changes. With more elastic demand, a smaller price increase is passed to consumers, making the supply side (producers) absorb a larger tax portion. Inelasticity on the supply side means producers have less ability to pass on tax costs to consumers, ensuring the tax burden is heavier on the producers .

An income elasticity of demand (ED I) of 2 suggests that the good is a luxury good. This is because the quantity demanded increases by 20% when income increases by 10%, indicating that the demand for the good rises significantly more than the rise in income. A value of ED I greater than 1 characterizes luxury goods as they exhibit higher demand growth relative to income growth .

'Food' generally has less elastic demand compared to 'Kinh Do soft cake' because food is a necessity, whereas Kinh Do soft cake is a specific brand of snack, which is more of a luxury. Elasticity tends to decrease with the necessity level of the product. Necessities have inelastic demand; consumers will buy them regardless of price changes. Contrastingly, luxury goods like branded snacks have more elastic demand as consumers are more responsive to price changes .

If total revenue increases as a result of a price increase, the demand is inelastic. This is because when demand is elastic, a price increase leads to a proportionally larger decrease in quantity demanded, reducing total revenue. Conversely, in this scenario, where a 5% price hike boosts revenue by 2%, it indicates that demand is inelastic since the price increase outweighs the drop in quantity demanded .

A decrease in gasoline prices does not necessarily make the demand curve for motorbikes more elastic. Although the demand curve might shift to the right, indicating an increase in quantity demanded at each price level, elasticity is determined by the slope and price sensitivity. Therefore, the assertion that the curve is more elastic is false as elasticity depends on these factors and not solely on a shift in the demand curve .

The simultaneous price increase of goods X and Y suggests that they are substitutes. When the price of good Y rises, consumers switch to good X, increasing its demand. As a result, firms may increase the price of X due to higher demand. This positive relationship indicates that the two goods are alternatives to each other, rather than complements, since an increase in one’s price would typically decrease the demand for the other if they were complements .

The slope of a demand curve is constant because it is a straight line depiction of price vs. quantity demanded. However, point elasticity of demand varies along the curve, as it measures the responsiveness of quantity demanded to a price change at a specific point. Therefore, not all points on the demand curve have the same value of price elasticity, making the statement false .

A fixed expenditure of $25.00 per week indicates unitary price elasticity of demand for coffee. This means that any price change leads to a proportional change in quantity demanded, maintaining constant total spending. If the consumer strictly spends this amount regardless of price fluctuations, it implies they adjust consumption proportionally with price changes to stabilize their spending .

Such a significant customer loss with a minor price increase demonstrates highly elastic demand. In a competitive market, if a small price change leads to a large drop in quantity demanded, it shows that consumers are very sensitive to price changes, opting to switch to competitors or alternative services. This high elasticity is typical in competitive industries where substitutes are readily available and switching costs are low .