The smaller the price elasticity of demand, the
a. steeper the demand curve will be through a given point.
b. flatter the demand curve will be through a given point.
c. more strongly buyers respond to a change in price between any two prices P1 and P2.
d. smaller the decrease in equilibrium price when the supply curve shifts rightward from S1 to S2.
a
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All else constant, if the central bank wants to slow the pace at which the economy is expanding, it should increase interest rates
Indicate whether the statement is true or false
Suppose that for a monopolist, MR = MC = $10 and P = $15 at the profit-maximizing level of output. At this level of output, the firm
a. is earning a profit b. will shut down if AVC > $15 c. is making $5 profit on each unit sold d. will shut down if ATC > $15 e. is losing $5 per unit produced