A Linear Demand Curve

question 23

Multiple Choice

A linear demand curve

• A)Can have constant elasticity if its slope is more than one
• B)Will have an ever rising total revenue function
• C)Becomes less elastic as price falls
• D)Always has a constant elasticity

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Definitions:

Volatile

Characterized by or subject to rapid or unexpected changes, especially in the context of financial markets or securities prices.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Strike Price

The set price at which an option contract can be bought or sold when it is exercised.

Pre-Tax Net Profit

The amount of profit earned by a company before taxes are deducted.