Suppose the Equilibrium Price in the Market Is $10 and the Price

question 124

Multiple Choice

Suppose the equilibrium price in the market is $10 and the price elasticity of demand for the linear demand function at the market equilibrium is −1.25.Then we know that:

• A) demand is inelastic.
• B) marginal revenue is $2.
• C) marginal revenue is $50.
• D) demand is unit elastic.

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