If price elasticity is greater than one, then demand is said to be elastic
Indicate whether the statement is true or false
True
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Refer to Figure 10.7. A movement from point C to point A could be caused by
A) a negative demand shock. B) a decrease in the term premium investors expect in the future. C) a decrease in the default-risk premium. D) a decrease in the expected rate of inflation.
Keynesian economists believe that the government should do what during a downturn in the economy?
a. Increase government spending and decrease taxes b. Increase government spending and increase taxes c. Decrease government spending and decrease taxes d. Decrease government spending and increase taxes
An increase in nominal GDP (with inflexible prices) results in:
a. an increase in the nominal rate of interest. b. an increase in the U.S. dollar exchange rate. c. a decrease in the nominal rate of interest. d. increased price and wage flexibility.
You are the manager of a monopoly that faces a demand curve described by P = 63 ? 5Q. Your costs are C = 10 + 3Q. The profit-maximizing output for your firm is:
A. 6. B. 5. C. 4. D. 3.