A. Suppose the equilibrium price in the market is $24 and the price elasticity of demand for the linear demand function at the market equilibrium is -1.5. Then we know that (show work): A. demand is inelastic. B. marginal revenue is $8. C. marginal revenue is $20. D. demand is unit elastic.
A. Suppose the equilibrium price in the market is $24 and the price elasticity of demand for the linear demand function at the market equilibrium is -1.5. Then we know that (show work): A. demand is inelastic. B. marginal revenue is $8. C. marginal revenue is $20. D. demand is unit elastic.
Chapter5: Price Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 9SQP
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A. Suppose the equilibrium price in the market is $24 and the price elasticity of demand for the linear demand function at the market equilibrium is -1.5.
Then we know that (show work):
A. demand is inelastic.
B. marginal revenue is $8.
C. marginal revenue is $20.
D. demand is unit elastic.
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