The price elastic portion of the linear demand curve lies:
a. b and c.
b. above the point of unit elasticity.
c. anywhere to the left of current market prices.
d. below the point where total revenue is maximized.
e. at the intersection with the supply curve.
Question 2
Avital and Joshua each have their own business selling lemonade in front of their houses. When they each charge 25 cents per glass, their total revenues are equal. However, when they each charge 40 cents per glass, Avital's revenues are bigger than Joshua's revenues. This is because:
a. Joshua faces a more inelastic demand curve.
b. Avital faces a more elastic demand curve.
c. Joshua faces a more elastic demand curve.
d. Avital faces a less inelastic demand curve.
e. there is a market failure.
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