Suppose That the Elasticity of Demand at a Competitive Equilibrium

question 21

Multiple Choice

Suppose that the elasticity of demand at a competitive equilibrium is 2.50.If the price under monopoly is 10 percent higher than under perfect competition,assuming identical cost curves,one can conclude that the monopoly output is _____ percent below of the competitive output.

• A)25
• B)40
• C)2.5
• D)4

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Definitions:

Delegation

The assignment of authority and responsibility to another person to carry out specific activities while the person delegating retains the ultimate responsibility for the outcome.

Giving Orders

The act of commanding, directing, or instructing someone to do something.

Responsibility

The state or fact of having a duty to deal with something or of having control over someone.

Express Opinions

The act of verbally or non-verbally conveying one's personal thoughts, beliefs, or preferences.