When quantity moves proportionately the same amount as price, demand is
a. elastic, and the price elasticity of demand is 1.
b. perfectly elastic, and the price elasticity of demand is infinitely large.
c. perfectly inelastic, and the price elasticity of demand is 0.
d. unit elastic, and the price elasticity of demand is 1.
d
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Which of the following is not a key feature of monopolistic competition?
a. Excess capacity b. A markup of price over marginal cost c. Positive economic profits for firms in the long run d. Differentiated products among firms in the market
When a surplus exists for a product,
A. Producers increase supply. B. Producers reduce the level of output and reduce price. C. Consumers increase demand. D. Government purchases decrease.
When the rate of cyclical unemployment is zero, the:
A. natural rate of unemployment must also be zero. B. rate of frictional unemployment must be negative. C. economy must have entered a recessionary stage. D. economy is considered to be at full employment.
When analyzing the behavior of oligopolists, which of the following is crucial for the success of game theoretic analysis?
A. Payoffs do not need to reflect the true payoffs of the oligopolists, they just need to be greater than or equal to zero. B. Do not construct the payoffs of the oligopolists to be interdependent, as the payoff of one player usually does not affect the payoff of the other players. C. Assume that oligopolists always move simultaneously. D. Make sure the problem you are considering is of a one-shot or repeated nature, and you model it accordingly because the order in which players make decisions is important.