Suppose That Along a Linear Demand Curve,the Elasticity of Demand

question 4

Multiple Choice

Suppose that along a linear demand curve,the elasticity of demand is equal to 1 when the price is $4 and the quantity is 100 units.Then the

• A) marginal revenue is negative when output exceeds 100 units.
• B) elasticity of demand is less than 1 when output exceeds 100 units.
• C) marginal revenue is 0 when output equals 100 units.
• D) Only answers A and B are correct.
• E) Answers A, B, and C are correct.

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