Assume that when the price of cantaloupes is $2.50 the demand for cantaloupes is unit-elastic, and that the demand curve for cantaloupes is linear and downward sloping
If firms lower the price of cantaloupes to $2.00 which of the following statements can be made regarding the price elasticity of demand for cantaloupes?
A) The demand for cantaloupes at $2.00 must be elastic.
B) The demand for cantaloupes at $2.00 must be unit elastic.
C) We cannot determine whether the demand for cantaloupes is elastic or inelastic without knowing what the quantity demanded is at each price.
D) The demand for cantaloupes at $2.00 must be inelastic.
D
You might also like to view...
All of the following accurately describes China's currency peg EXCEPT
A) pegging against the dollar ensured that Chinese exporters faced stable prices on exports to the U.S. B) some U.S. firms complained that the peg gave Chinese firms an unfair advantage over U.S. firms. C) the Chinese currency was allowed to depreciate moderately in the years preceding the financial crisis. D) many economists argued that the Chinese currency was undervalued.
Other things being equal, if input prices rise in a country, then there would be
A) cost-push inflation. B) demand-pull inflation. C) cost-push deflation. D) more production and a lower price level.