Which of the following statements about the relationship between marginal revenue, price, and the price elasticity of demand, is true? a) At the midpoint of a linear demand curve, the value of price elasticity of demand is zero. b) With a perfectly elastic demand curve, whatever output the firm produces, the marginal revenue is always greater than the market price. c) If the price elasticity of demand PED = -1 at all points on a demand curve, then the firm can choose any level of output, and earn the same revenue. d) If a firm has inelastic demand, then the marginal revenue curve will be upward sloping.
Which of the following statements about the relationship between marginal revenue, price, and the price elasticity of demand, is true? a) At the midpoint of a linear demand curve, the value of price elasticity of demand is zero. b) With a perfectly elastic demand curve, whatever output the firm produces, the marginal revenue is always greater than the market price. c) If the price elasticity of demand PED = -1 at all points on a demand curve, then the firm can choose any level of output, and earn the same revenue. d) If a firm has inelastic demand, then the marginal revenue curve will be upward sloping.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Which of the following statements about the relationship between marginal revenue, price, and the
a) At the midpoint of a linear demand curve, the value of price elasticity of demand is zero.
b) With a perfectly elastic demand curve, whatever output the firm produces, the marginal revenue is always greater than the market price.
c) If the price elasticity of demand
d) If a firm has inelastic demand, then the marginal revenue curve will be upward sloping.
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