Question

The following are correct description for the special cases of a Linear Demand, EXCEPT:

Question 3 options:

	A linear demand has price elasticities that range from zero to plus infinity.
	In the Linear Demand, the upper portion of the demand is Elastic.
	The Linear Demand generates the same revenue at any point in the demand.
	For a Linear Demand, revenue is maximized when Price Elasticity equals One.

The following are true statements about a Supply Curve that is Highly Inelastic, EXCEPT:

Question 4 options:

	It refers to the case where there is high Total Cost of Production.
	It reflects typically a case of high Adjustment Cost in Production.
	The Supply Curve is Highly Vertical.
	Over the supply curve, the change in quantity is less than proportional than the change in price.

The following are correct descriptions about a Price Ceiling, EXCEPT:

Question 5 options:

	Is the regulated price imposed below the market price that would prevail in equilibrium.
	A price ceiling will reduce producer's surplus if the regulated price prevails.
	A price ceiling will create an excess of supply.
	A price ceiling could lead to an increase in producer's surplus, if a black market emerges.

Answer 1

1. highly elastic |Gd|>1

a product will be considered highly elastic in demand if it has the charecteristic i.e: it it's considered a highly necessary consumption good

3.the correct description for the special cases of a linear demand is .....the linear demand generates the same revenue at any point in the demand.

4. the true statement about a supply curve that is hghly in elastic is :it reflects typically a case of high adjustment cost in production .

5. the description of a price ceiling is a price ceiling will create an excess of supply