Regarding the concept of price-elasticity, which statement is incorrect? O a. A linear demand has constant slope, but variable price-elasticity. а. O b. In terms of price-elasticity, a linear demand or supply with zero slope is perfectly elastic. Oc. Price-elasticities are often lower in the short run than in the long run. O d. If supply is price-inelastic, shifts in demand will have a larger effect on the equilibrium quantity than on the equilibrium price. e. When demand is price-inelastic, decreases in P offset increases in Q, meaning less revenue (PQ) for producers.

Regarding the concept of price-elasticity, which statement is incorrect? O a. A linear demand has constant slope, but variable price-elasticity. а. O b. In terms of price-elasticity, a linear demand or supply with zero slope is perfectly elastic. Oc. Price-elasticities are often lower in the short run than in the long run. O d. If supply is price-inelastic, shifts in demand will have a larger effect on the equilibrium quantity than on the equilibrium price. e. When demand is price-inelastic, decreases in P offset increases in Q, meaning less revenue (PQ) for producers.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 3PA: Suppose the price elasticity of demand for heating oil is 02. in the short run and 0.7 in the long...

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Similar questions

What is the relationship between price elasticity and position on the demand curve? For example, as you move up the demand curve to higher prices and lower quantities, what happens lo the measured elasticity? How would you explain that?
If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?
If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
Suppose you are in change of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants to earn as much revenue as possible from this drug. If the elasticity of demand for your companys product at the current price is 1.4, would you advise the company to raise the price, lower the price, or to keep the price the same? What if the elasticity were 0.6? What if it were 1? Explain your answer.
What is the price elasticity of supply? Can you explain it in your own words?