Over time, the price of personal computers has fallen dramatically. All else constant, th
Over time, the price of personal computers has fallen dramatically. All else constant, this would lead us to expect that demand for personal computers has become more price elastic.
84) When calculating the arc elasticity of demand, the percentage change in price (quantity) should be based on the average of the starting and ending prices (quantities).
85) Assume that when the price of good X is $12, quantity demanded is 32. When price is decreased to $9, quantity demanded increases to 45. Over this range, the arc elasticity of demand is 1.182.
86) Assume the demand function for a particular good can be written as P = 150 - 6Q. When P = 12, the point elasticity of demand equals 2.08.
87) In the case of a linear demand curve, average revenue is equal to price, while (with the exception of Q = 1) marginal revenue is less than price.
88) In the case of a linear demand function, the marginal revenue function is twice as steep as the demand function.
89) For a linear demand function, slope and the price elasticity of demand are equal.
90) When demand is perfectly inelastic with respect to price, the demand curve is horizontal.
91) Assume the income elasticity for a particular good has been estimated to be -0.68. Based on this information, we can infer that the good is inferior and a necessity.
92) We would expect the cross price elasticity of demand between digital cameras and film cameras to be positive.