Which of the following is true? If the price elasticity of demand for an individual seller...

Which of the following is true?

If the price elasticity of demand for an individual seller is h = 1.62, then the firm’s demand is inelastic.

b. If the price elasticity of demand for an individual seller is h = 2.8, then the firm’s demand is unitary elastic.

c. The price elasticity (in absolute value) of demand for a particular seller, or brand, is always smaller than the overall market elasticity of demand.

d. The price elasticity (in absolute value) of demand for a particular seller, or brand, is always larger than the overall market elasticity of demand.

e. The price elasticity (in absolute value) of demand for a particular seller, or brand, must always be less than 1.

Solutions

Expert Solution

Answer : Option C is correct. The price Elasticity of demand for particular seller or brand is always smaller than the overall market elasticity of demand because as market is sum total of elasticity of different firms for same product so we can conclude that price elasticity of demand for particular seller is less than the total market price elasticity.

Rahul Sunny answered 1 year ago

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