If a huge percentage change in price leads to a small percentage change in quantity demanded, then demand is said to be elastic
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following is true regarding a price support set above the equilibrium price?
i. The price support increases the price consumers pay. ii. The price support creates a deadweight loss. iii. The price support decreases output. A) i and ii B) i and iii C) iii only D) i, ii, and iii E) i only
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. Which of the following gives the market-clearing curve for milk?
A. Pm = 4 - (Pc/6) B. Pm = (32/12) - (Pc/6) C. Pm = (32 - 2Pc)/12 D. Pm = (32/12) + (Pc/6)
In the above figure, the break-even output and price is
A) $9 and 14. B) $13 and 14. C) $11 and 16. D) $10 and 17.
A business cycle is the