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Which of the following statements is incorrect?
 
A. If a firm decreases the price of its product, its total revenue will decrease.
 
B. The own-price elasticity of demand is constant at all points along a linear demand curve.
 
C. As the price of X falls and we move down an individual's demand curve for X, the money income of the individual also changes.
 
D. All of the answers are incorrect.

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Beverley Smith
Beverley SmithLv2
23 Mar 2020
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Related questions

Which of the following is correct?
 
A. In the case of all linear demand curves, the slope and the price elasticity of demand are equal at each point on the demand curve.
 
B. The slope of the demand curve is some constant value but the value of the price elasticity coefficient increases as we move down the demand curve.
 
C. The slope of the demand curve is some constant value but the value of the price elasticity coefficient decreases as we move down the demand curve.
 
D. There is no connection between the slope of the demand curve and the value of the price elasticity coefficient.

The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

a.

all nonprice determinants of demand are held constant.
b.

only price is held constant.
c.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

a.

there is a movement along a given demand curve.
b.

the demand curve shifts in the opposite direction.
c.

the supply curve shifts in the opposite direction.
d.

the demand curve shifts in the same direction.

The data below represent a demand schedule.

Price / demand

6           0

5           1

4           2

3           3

2           4

1           5

0           6

a. Draw a demand curve.

b. Use the midpoint formula for Ed to determine price elasticity of demand for each of the four possible $1 price changes.

Moving from $5 to $4: Ed = .      

Moving from $4 to $3: Ed = .      

Moving from $3 to $2: Ed = .      

Moving from $2 to $1: Ed = .

c. What can you conclude about the relationship between the slope of the demand curve above and its elasticity?    

The demand curve above has a constant slope of  (-1∞10), but elasticity (increases/decreases) as we move down the curve.

d. Explain in a nontechnical way why demand is elastic in the upper-left segment of the demand curve and inelastic in the lower-right segment.

 

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