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Price Elasticity of Demand Is a Numerical Measure of How

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True/False

Price elasticity of demand is a numerical measure of how much quantity demanded rises as price falls or quantity demanded falls as price rises.


Definitions:

Average Variable Cost Curve

A graph that shows how the average variable cost of production changes as the quantity of output changes.

Marginal Cost

The price involved in creating another unit of a good or service.

Break-even Price

The price at which total revenues equals total costs, resulting in neither profit nor loss.

Shut-down Price

The price level at which a business's revenue just covers its variable costs, below which it will cease operations.

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