# ECO561 ECO/561 Week 6 Quiz (6/6) - 62919

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ECO561 ECO-561 ECO/561 Week 6 Quiz (6/6)

1. If the demand curve is QD = 100 – 10P and there is a \$1 price increase, then the elasticity of demand at P = 2 is

2. If the absolute value of a demand elasticity is less than 1, then

3. If the cross-price elasticity is negative, then the two goods are

4. Under perfect competition, a firm maximizes its profit by setting

5. In a large city, a good, real-world example for perfect competition would be

6. A firm under monopolistic competition will earn

Solution Description

ECO561 ECO-561 ECO/561 Week 6 Quiz (6/6)

Example

2. If the absolute value of a demand elasticity is less than 1, then

• A. the demand is inelastic, and a price rise will reduce the total revenue
• B. the demand is inelastic, and a price rise will increase the total revenue