Answer the question on the basis of the following demand schedule. Price Quantity Demanded $6 1 $5 2 $4 3 $3 4 $2 5 $1 6 Which of the following is correct?
A. Although the slope of the demand curve is constant, price elasticity increases as we move from high to low price ranges.
B. Although the demand curve is convex to the origin, price elasticity of demand is constant throughout.
C. Although the slope of the demand curve is constant, price elasticity declines as we move from high to low price ranges.
D. A steep slope means demand is inelastic; a flat slope means demand is elastic.
Answer: C. Although the slope of the demand curve is constant, price elasticity declines as we move from high to low price ranges.
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Refer to the above figure. If the aggregate demand curve shifts beyond AD5, then the economy will experience
A) stagflation. B) demand-pull inflation. C) structural inflation. D) cost-push inflation.
If the interest rate is 10% then the net present value of these cash flows is
a. $5,000 b. - $9,091 c. -$15,290 d. -$21,901
Which of the following statements is not correct?
a. In a long-run equilibrium, marginal firms make zero economic profit. b. To maximize profit, firms should produce at a level of output where price equals average variable cost. c. The amount of gold in the world is limited. Therefore, the gold jewelry market probably has a long-run supply curve that is upward sloping. d. Long-run supply curves are typically more elastic than short-run supply curves.
Reaching a positive-positive outcome through a commitment strategy:
A. will only benefit the players and will not serve public interest. B. can benefit everyone. C. will always benefit everyone. D. will not benefit anyone.