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Questions and Answers
At which point on the demand curve does elasticity become infinity?
At which point on the demand curve does elasticity become infinity?
- Point A
- Point t (correct)
- Point T
- Point R
What is the significance of the midpoint method in calculating price elasticity?
What is the significance of the midpoint method in calculating price elasticity?
- It leads to an infinite price elasticity.
- It results in a price elasticity of zero.
- It avoids confusion between initial and final price and quantity figures. (correct)
- It is only applicable when the demand curve is a straight line.
What happens to elasticity as you move from point T towards point t on the demand curve?
What happens to elasticity as you move from point T towards point t on the demand curve?
- Elasticity remains constant
- Elasticity decreases
- Elasticity becomes zero
- Elasticity increases (correct)
When might arc-elasticity be required to be calculated?
When might arc-elasticity be required to be calculated?
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How is elasticity calculated using the midpoint method?
How is elasticity calculated using the midpoint method?
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What does a point elasticity of zero indicate?
What does a point elasticity of zero indicate?
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Why is it important to calculate elasticity over an arc of the demand curve?
Why is it important to calculate elasticity over an arc of the demand curve?
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What happens to elasticity at the midpoint of the demand curve?
What happens to elasticity at the midpoint of the demand curve?
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What does a negative elasticity value indicate?
What does a negative elasticity value indicate?
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What does a point elasticity greater than one signify?
What does a point elasticity greater than one signify?
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