Identify a Statement That Is True About a Linear Demand

question 2

Multiple Choice

Identify a statement that is true about a linear demand curve.

• A)Along a linear demand curve, both the slope and price elasticity are constant.
• B)Along a linear demand curve, the price elasticity is constant, but the slope varies.
• C)Along a linear demand curve, total revenues are constant.
• D)Along a linear demand curve, the slope is constant, but the price elasticity varies.
• E)Along a linear demand curve, total revenues are negative.

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace for similar financial instruments or loans.

Financial Instrument

A contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Maturity Value

The amount that will be payable to the holder of a financial instrument at its maturity date, including principal and interest.

Stated Interest Rate

The nominal or advertised interest rate on a loan or bond, not accounting for compounding or fees.