If the absolute value of the price elasticity of demand for a product is less than 1, then
A. demand is inelastic.
B. quantity demanded is very sensitive to price changes.
C. demand is elastic.
D. demand is unit-elastic.
Answer: A
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For a natural monopoly, economies of scale
A) exist along the long-run average cost curve at least until it crosses the market demand curve. B) and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. C) lead to a legal barrier to entry. D) as well as constant returns to scale and diseconomies of scale exist along the long-run average cost curve at least until it crosses the market demand curve. E) are totally absent.
A short-run total cost function, TC = 100 + 32Q - 4Q2 + 0.4Q3, indicates the existence of
A) a linear total cost curve. B) a constant average variable cost curve. C) a U-shaped average variable cost curve. D) a constant marginal cost curve.
Generally, microeconomics
A) has little to say about the entrepreneur B) says a good bit about the entrepreneur. C) equates the entrepreneur and the manager. D) equates management and shareholders.
A firm will use more and more labor until the marginal revenue product of labor
A. rises to the level of the wage rate. B. falls to the level of the wage rate. C. rises above the wage rate. D. falls below the wage rate.