Figure 7-4 Which of the Following Is True for the Demand Curve

question 41

Multiple Choice

Figure 7-4
Which of the following is true for the demand curve depicted in Figure 7-4?

• A) An increase in price from $2 to $3 will reduce total expenditures on the product.
• B) In the $2 to $3 range, the price elasticity of the demand curve is approximately unitary.
• C) At a price of $2, the price elasticity of the demand curve equals approximately − 2.5.
• D) In the $2 to $3 range, the demand curve is inelastic.

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Definitions:

Economic Depression

A prolonged period of significant decline in economic activity across a broad spectrum of the economy, marked by high unemployment and low production and consumption.

National Legislation

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Agricultural South

Refers to the region in the United States where agriculture, particularly the cultivation of crops like cotton and tobacco, was the dominant economic activity, especially in the period before the Civil War.

African Americans

A racial or ethnic group in the United States with ancestry primarily from sub-Saharan Africa.