If a good has a price elasticity of demand coefficient less than one, then:
a. this good has an elastic demand.
b. this good has an inelastic demand.
c. a 10 percent increase in the price will result in a greater than 10 percent decrease in the quantity demanded.
d. the demand curve will be vertical.
b
You might also like to view...
Consider the market for wheat which is a perfectly competitive market. Is the market demand curve the same as the demand curve facing an individual producer? If not, explain how and why they are different? Illustrate your answer graphically
What will be an ideal response?
When two countries choose to use a new currency, they are
A) participating in a monetary union. B) dollarizing. C) forming an optimal currency area. D) increasing their monetary autonomy.
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the aggregate demand curve
A) slopes upward. B) slopes downward. C) is vertical. D) is horizontal.
Ultimately, the change in unemployment associated with a change in inflation is due to
a. the shape of the long-run aggregate supply curve. b. unanticipated inflation, not inflation per se. c. anticipated inflation, not inflation per se. d. a change in the natural rate of unemployment.