« previous next »

Author Question: Comment on the following statement: Elasticity is constant along a straight-line demand curve. ... (Read 197 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?

No drugs are available to relieve parathyroid disease. Parathyroid disease is caused by a parathyroid tumor, and it needs to be removed by surgery.

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

Stevens-Johnson syndrome and Toxic Epidermal Necrolysis syndrome are life-threatening reactions that can result in death. Complications include permanent blindness, dry-eye syndrome, lung damage, photophobia, asthma, chronic obstructive pulmonary disease, permanent loss of nail beds, scarring of mucous membranes, arthritis, and chronic fatigue syndrome. Many patients' pores scar shut, causing them to retain heat.

Did you know?

Individuals are never “cured” of addictions. Instead, they learn how to manage their disease to lead healthy, balanced lives.

Did you know?

Warfarin was developed as a consequence of the study of a strange bleeding disorder that suddenly occurred in cattle on the northern prairies of the United States in the early 1900s.

Example of Reconciling a Bank Statement Cont. Example of Reconciling a Bank Statement Cont.
A typical ECT sensor temperature versus voltage curve. A typical ECT sensor temperature versus voltage curve.
Concentration affects where the precipitin line forms. When 1 reactant is held at a constant ... Concentration affects where the precipitin line forms. When 1 reactant is held at a constant ...
Write the equation in general form of the line passing through the point Write the equation in general form of the line passing through the point
First and Second Line Drugs for the Treatment of TB First and Second Line Drugs for the Treatment of TB
The population of Asia increases rapidly, the demand for food and water is also growing The population of Asia increases rapidly, the demand for food and water is also growing
Video: Autonomic Nervous System Animation

For a complete list of videos, visit our video library