In a competitive market where the elasticity of the market demand curve is -2, the elasticity of the supply curve is 1, and an individual firm faces a residual demand curve with an elasticity of -98. What happens to the individual firm's residual demand curve when the number of firms serving this market declines?
A) It becomes less elastic.
B) It becomes more elastic.
C) It does not change.
D) It cannot be determined.
A
You might also like to view...
In the absence of property rights, factories will dump waste into a waterway up to the point where ________ equals ________
A) marginal social cost; marginal social benefit B) marginal social cost; marginal private cost C) marginal private cost; marginal private benefit D) marginal private cost; marginal social cost
Refer to the information provided in Table 19.4 below to answer the question(s) that follow.Table 19.4Total IncomeTotal Taxes$10,000 $1,000 20,000 2,400 30,000 4,500 40,000 8,000Related to the Economics in Practice on page 393: Refer to Table 19.4. If income increases from $30,000 to $40,000, the marginal tax rate is
A. 5%. B. 20%. C. 35%. D. indeterminate from this information.
Historically, the high level of taxation on dividends relative to capital gains or interest led to _____
a. lower levels of corporate dividends b. higher levels of corporate dividends c. no changes in corporation behavior d. fewer incorporations
The Federal Reserve provides gold in exchange for Federal Reserve notes
a. True b. False Indicate whether the statement is true or false