Question 59
Recall from the lecture slides the diamond industry convinced people that it was essential to use a diamond ring to propose marriage. Which of the following elasticities below is consistent with this belief?
Diamonds’ PES = 0.7
Diamonds’ PES = 1.2
Diamonds’ PED = -0.5
Diamonds’ PED = -1.5
"C"
As this is an essential good in the market the elasticity of the good will be less,i.e. the elasticity will be less than 1. and negative.
Question 59 Recall from the lecture slides the diamond industry convinced people that it was essential...