Why do economists use the concept of elasticity in addition to measurement of the slope of the demand curve?
a. Mathematical equations are favored over graphical analysis.
b. Elasticities are independent of the units of measure.
c. The concept of elasticity can be used in other areas of economics, whereas the slope of the demand curve is only useful in demand analysis.
d. These terms are interchangeable, but elasticity has the more professional sound.
B
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People in the U.S. will rarely pay a great deal per gallon to obtain water because
A) there are so many excellent substitutes for water. B) there is no relationship between objective price and subjective value. C) they are usually creatures of habit. D) they think water, as a basic necessity, ought to be supplied at a very low price. E) they place a very low marginal value on water.
Vertical relationships can increase profits through
a. providing a mechanism for firms from evading regulation b. creating a double-markup problem c. making the incentives of manufacturers and retailers unaligned d. preventing price discrimination