Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Is the following statement true or false? Explain.
The own price elasticity is constant for linear demand.
Suppose you are a consultant for a Detroit Ford dealer. Let the market price be at $25,000 for a
Ford Taurus. If the dealer has a stock of unsold 2020 Ford Taurus, and you know that the elasticity
of demand for this dealer's cars is -1.5, would you recommend any change in price? Why?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1379c830-3130-4b4c-8466-9a3b4fa71017%2F9e8ef38e-1d31-4e41-a37b-9a09fa4211d9%2Fg8y44rg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Is the following statement true or false? Explain.
The own price elasticity is constant for linear demand.
Suppose you are a consultant for a Detroit Ford dealer. Let the market price be at $25,000 for a
Ford Taurus. If the dealer has a stock of unsold 2020 Ford Taurus, and you know that the elasticity
of demand for this dealer's cars is -1.5, would you recommend any change in price? Why?
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