Author Question: Refer to Scenario 3 . Compare and discuss the two elasticity estimates computed above. Without ... (Read 89 times)

saliriagwu · **on:** Jun 29, 2018

Refer to Scenario 3 . Compare and discuss the two elasticity estimates computed above.

Without doing any more calculations what would you expect to happen to the value of the elasticity estimates as price continues to fall? Assume a linear demand curve.

Question 2

Some economists believe that one factor that caused the financial crisis of 2007-2009 was top managers of large financial services firms making riskier investments than were in the best interests of the firms' shareholders.

Indicate whether the statement is true or false

fur · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Elasticity is greater for the higher prices. As price continues to fall we would expect that the elasticity would fall as well.

Answer to Question 2

TRUE