A Linear Demand Curve

question 15

Multiple Choice

A linear demand curve:

• A) has a constant elasticity.
• B) will be more elastic when price is low and more inelastic when price is high.
• C) must be either perfectly inelastic or perfectly elastic.
• D) has a constant slope.

---

Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Elastic

Describes the responsiveness of demand or supply to changes in price or income.

Free Entry

A market condition where there are no barriers or restrictions preventing new competitors from joining the market.

Long-Run Profits

Long-Run Profits refer to the sustained earnings a firm can achieve over time, considering all input costs are variable and market conditions may change.