« previous next »

Author Question: Comment on the following statement: Elasticity is constant along a straight-line demand curve. ... (Read 204 times)

leilurhhh

  • Hero Member
  • *****
  • Posts: 560
on: Jun 29, 2018
Comment on the following statement: Elasticity is constant along a straight-line demand curve.
 
  What will be an ideal response?

Question 2

The firm shown in the figure above is
 
  A) a natural monopoly because its LRAC curve slopes downward where it intersects the demand curve.
  B) not a natural monopoly because its LRAC curve slopes downward where it intersects the demand curve.
  C) not a natural monopoly because its MC curve is horizontal.
  D) not a natural monopoly because its MC curve is below its LRAC curve.
Foundations of Microeconomics ¦ Bade, Parkin ¦ 8th Edition
Buy Test-Bank


ilianabrrr

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is false. While the slope is constant along a straight line, the elasticity is not. In fact, at high prices (the upper area of a demand curve) the demand is elastic. As price falls (and quantity demanded increases), the price elasticity of demand gets smaller (in absolute value).

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

Nearly 31 million adults in America have a total cholesterol level that is more than 240 mg per dL.

Did you know?

There are actually 60 minerals, 16 vitamins, 12 essential amino acids, and three essential fatty acids that your body needs every day.

The effects of germ-line versus somatic cell mutations. The effects of germ-line versus somatic cell mutations.
Examining the survivorship curve of a Dall mountain sheep population reveals information on the caus Examining the survivorship curve of a Dall mountain sheep population reveals information on the caus
Scaling the Earth down to the size of a basketball, the Moon is roughly the size of a tennis ball. T Scaling the Earth down to the size of a basketball, the Moon is roughly the size of a tennis ball. T
Blood PH Curve Hemoglobin Blood PH Curve Hemoglobin
The Movius line separates regions of the world where Acheulean hand axes were made from regions wher The Movius line separates regions of the world where Acheulean hand axes were made from regions wher
Fuel should be heard returning to the fuel tank at the fuel return line if the fuel-pump and ... Fuel should be heard returning to the fuel tank at the fuel return line if the fuel-pump and ...
Video: Molecules, Membrane Permeability and Structure

For a complete list of videos, visit our video library