Explain why when the demand curve for a good is elastic, a one percent reduction in the price of the good will increase a consumer's expenditure on the good
What will be an ideal response?
When a good has an elastic demand, a one percent decrease in the price will result in a greater than one percent increase in the quantity demanded. Thus, the price multiplied by the quantity will increase when the price declines by one percent.
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In a competitive market, if buyers did not know all the prices charged by the many firms
A) all firms still face horizontal demand curves. B) firms sell a differentiated product. C) demand curves can be downward sloping for some or all firms. D) the number of firms will most likely decrease.
Which of the following ideas were central to the conclusions drawn by Thomas Malthus in his 1798 "Essay on the Principle of Population"?
A) Short-run time period B) Shortage of labor C) Law of diminishing resource availability D) Law of diminishing returns