Which of the Following Statements About the Elasticity of Demand

question 271

Multiple Choice

Which of the following statements about the elasticity of demand for a monopolist is TRUE?

• A) Since a monopolist produces a good with no close substitutes, the price elasticity of demand for the good is zero.
• B) A monopolist produces a good with demand that is perfectly inelastic because people can not do without the good.
• C) Since every good has some substitute, even if imperfect, the demand for a good produced by a monopolist will not have zero price elasticity.
• D) Since the demand curve of a monopolist is downward sloping, the demand for the good must be inelastic.

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Definitions:

Corporate-Level Strategy

Strategic approaches focused on the overall scope and direction of a corporation, deciding on business units, diversification, and market positioning.

Portfolio

A collection of investments, projects, or products held by an individual or an organization, designed to reduce risk and maximize returns.

Cash Flow

The net amount of cash being transferred into and out of a business, crucial for maintaining operations.

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The Core Purpose represents the fundamental reason a company exists beyond making a profit, often reflecting its long-term vision and values.