If the price elasticity of demand is computed for two products, and product A measures .79, and product B measures 1.6, then:
A. product A is more elastic than product B.
B. product B is more elastic than product A.
C. consumers are more responsive to price changes in product A than in product B.
D. products A and B must be substitutes.
Answer: B
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In Figure 21.4, the long-run average total cost curve is given by the curved line segment
A. ABFDGE. B. ACE. C. BFD. D. ABF only.
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