When there are very few substitutes for a good, the demand for the good will tend to be
A. perfectly elastic.
B. inelastic.
C. elastic.
D. unitary.
Answer: B
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The figure above shows that to make the price support work, the government buys ________ million tons of sugar beets
A) 10 B) 20 C) 30 D) 5 E) 15
The demand for a good is more price inelastic if
A) its price is higher. B) the percentage of income spent on it is larger. C) it is a luxury good. D) it has no close substitutes.
The short-run supply curve of the perfectly competitive industry is found by summing the
A. AC curves of the individual firms in the industry. B. AVC curves of the individual firms in the industry. C. MC curves above AVC of the individual firms in the industry. D. There is no short-run supply curve in a competitive industry.
The more elastic the supply of a product, the more the actual burden of a tax on the product will:
A. fall on sellers. B. fall on buyers. C. fall equally on both buyers and sellers. D. create a smaller deadweight loss (or excess burden).