The Smaller the Price Elasticity of Demand,the

question 18

Multiple Choice

The smaller the price elasticity of demand,the

• A)steeper the demand curve will be through a given point.
• B)flatter the demand curve will be through a given point.
• C)more strongly buyers respond to a change in price between any two prices P₁ and P₂.
• D)smaller the decrease in equilibrium price when the supply curve shifts rightward from S₁ to S₂.

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Definitions:

Intercept

In statistics and mathematics, the point at which a line crosses the vertical axis of a graph, indicating the value of the dependent variable when all independent variables are zero.

Predicted Income

An estimate of future earnings based on variables such as education, experience, and other relevant factors, often derived using statistical models.

Outcome Variable

Another term for the dependent variable, which is the variable expected to change as a result of manipulations to the independent variable(s).

Correlated

A statistical term describing the extent to which two variables change together, indicating a relationship between them.