The Price Elasticity of a Demand Curve with a Constant

question 216

Multiple Choice

The price elasticity of a demand curve with a constant slope:

• A) is equal to the slope.
• B) is greater than the slope.
• C) is less than the slope.
• D) increases in absolute value as the price rises.

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Definitions:

Willingness to Pay

The maximum amount an individual is prepared to spend on a good or service, reflecting the value they place on it.

Consumer Surplus

The discrepancy in the total charges consumers are prepared and economically able to bear for a good or service, and the charges they actually bear.

Willingness to Pay

The maximum amount an individual is prepared to spend for a good or service, reflecting the value they assign to it.

Consumer Surplus

The difference as marked by what consumers are prepared to spend on a good or service versus the actual payment made.