Explain why the shape of the demand curve will determine the how a shock to the market equilibrium affect price and quantity
What will be an ideal response?
A flatter demand curve has a smaller slope in absolute value. That means that consumers are more sensitive to price changes. Therefore, a change in price will cause a large reaction in quantity demanded.
You might also like to view...
By designating Federal Reserve currency as legal tender, the federal government
A) has ensured that Federal Reserve currency will serve as money. B) has guaranteed that Federal Reserve currency may be exchanged for an equivalent amount of gold or silver. C) has mandated that Federal Reserve currency be accepted for payment of debts. D) has mandated that Federal Reserve currency be accepted by citizens of foreign countries in exchange for their countries' currencies.
Demand is elastic if the price elasticity of demand is
a. less than 1. b. equal to 1. c. equal to 0. d. greater than 1.