On a linear demand curve that intersects both axes
A) the elasticity exceeds 1.00 at all prices.
B) the elasticity is less than 1.00 at all prices.
C) the elasticity equals 1.00 at all prices.
D) the elasticity decreases as the price falls and quantity increases.
D
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In the short run, a perfectly competitive firm will shut down if at the profit maximizing quantity the
A) P < AVC. B) AVC < ATC. C) P > ATC. D) P > MC.
The demand schedule is a price list for a fixed basket of consumer goods following a particular format
a. True b. False Indicate whether the statement is true or false
The price elasticity of demand for gasoline is 0.27 and for wine is 2.9 . If the government had the choice of taxing only one, which of the following should it choose?
a. tax gasoline b. tax wine c. tax neither, but raise the price elasticity of demand for each d. tax neither, but lower the price elasticity of demand for each e. tax neither, but raise the price elasticity of demand for gasoline and lower it for wine
An efficient allocation of resources requires that a product’s price equals its average cost.
Answer the following statement true (T) or false (F)