question archive Which of the following is true about a linear, downward sloping demand curve? (I) Demand becomes more elastic when you move down the demand curve
Which of the following is true about a linear, downward sloping demand curve? (I) Demand becomes more elastic when you move down the demand curve
Subject:EconomicsPrice:2.88 Bought3
Which of the following is true about a linear, downward sloping demand curve?
(I) Demand becomes more elastic when you move down the demand curve.
(II) Demand may become more or less elastic when you move down the demand curve.
(III) Total profit must be maximized when the goods are sold at the price with unit price elasticity of demand.
(IV) Marginal revenue must be zero when the goods are sold at the price with unit price elasticity of demand.
Select one:
(a) (II) only
(b) (III) only
(c) (II) and (IV)
(d) (I) only
(e) (IV) only
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(b) (III) only .
Unitary elastic demand is lied at the mid-point of demand curve as computed by graphical method of elasticity of demand. Elasticity contains higher value on the left of this and lower value on the right of this. In both sides, the quantity and price effect does not show equal weights. At unitary elastic demand, quantity and price effects are similar, that offers an opportunity to maximize profits.
