In a Competitive Market Where the Elasticity of the Market

question 31

Multiple Choice

In a competitive market where the elasticity of the market demand curve is -2,the elasticity of the supply curve is 1,and an individual firm faces a residual demand curve with an elasticity of -98.What is the number of firms in this market?

• A) 10
• B) 20
• C) 33
• D) Cannot be determined.

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Definitions:

Promise Under Seal

A formal commitment or contract that is legally binding because it is physically sealed, representing a solemn promise.

Equitable Estoppel

A legal principle preventing a party from denying facts if their own actions have led another to perceive those facts as true.

Legal Obligation

A duty enforced by law, requiring an entity or individual to conform to certain actions or refrain from certain acts.

Written Promise

A written document where one party agrees to perform or refrain from specific actions.