The president of Tucker Motors says, "Lowering the price won't sell a single additional Tucker car." The president believes that the price elasticity of demand is:
a. perfectly elastic.
b. elastic.
c. perfectly inelastic.
d. unitary elastic.
c
You might also like to view...
When the aggregate demand curve and the short-run aggregate supply curve intersect
A) the long-run aggregate supply curve must also intersect at the same point. B) structural and frictional unemployment equal zero. C) inflation must be increasing. D) the economy is in short-run macroeconomic equilibrium.
In the loanable funds market,
A. The price is the interest rate. B. The supply curve reflects the behavior of borrowers. C. If interest rates rise, firms borrow more. D. The demand curve reflects the behavior of lenders.
What is happening at point C?
a. Consumers are preordering products.
b. Consumers have maxed out their credit.
c. Inventories are being sold off to meet demand.
d. Excess production is being stored in inventories.
In the short run, the monopolistic competitor is just like the perfect competitor in that
A. each equates marginal revenue and marginal cost in order to maximize profits, with the result that price exceeds marginal revenue. B. either type of firm can earn economic profits, experience economic losses, or break even in the short run. C. new firms enter in the short run when firms are making profits. D. equilibrium is determined by setting price equal to marginal cost.