When the percentage change in quantity demanded is less than the percentage change in price, the demand for the good is ________
A) inelastic
B) unit elastic
C) perfectly inelastic
D) elastic
A
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A good will tend to be more price elastic if it
A. is a luxury good. B. has no close substitutes. C. is a small part of the household budget. D. is a necessity.
If the supply of a good is perfectly inelastic, the price elasticity of supply will equal
A) positive infinity. B) one. C) zero. D) none of the above.
When a perfectly competitive firm experiences positive economic profits
A) the high barriers to entry prevent further competition. B) existing firms exit the industry. C) additional firms enter the industry. D) firms have no incentive to exit or enter the industry.
In a competitive market, the price of a product
a. is determined by buyers, and the quantity of the product produced is determined by sellers. b. is determined by sellers, and the quantity of the product produced is determined by buyers. c. and the quantity of the product produced are both determined by sellers. d. None of the above is correct.