The Figure Given Below Shows the Demand Curves of Two

question 111

Multiple Choice

The figure given below shows the demand curves of two classes of buyers for tickets to a football match. Figure 24.4 D₁: Demand curve of group 1
D₂: Demand curve of group 2
MR₁: Marginal revenue of group 1
MR₂: Marginal revenue of group 2
MC: Marginal cost
In Figure 24.4, the demand curve D₂:

• A)has a price elasticity of demand greater than 1.
• B)is relatively less price elastic than D₁.
• C)is the inverse of the demand curve D₁.
• D)has a price elasticity of demand less than 1.
• E)represents the demand of the group that is more responsive to price changes.

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Definitions:

Output

The total amount of goods or services produced by a business, industry, or economy during a given period.

Average Total Costs

The total cost of production (fixed plus variable costs) divided by the total quantity of output, indicating the cost per unit of output.

Variable Costs

Costs that change in proportion to the level of output or activity.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.