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Which of the Following Describes a Correct Relation Between Price Q>a/2bQ > a / 2 b

Question 24

Multiple Choice

Which of the following describes a correct relation between price elasticity of demand and a monopolist's marginal revenue when inverse demand is linear, P = a-bQ?


A) Demand is elastic when Q>a/2bQ > a / 2 b .
B) Demand is inelastic when Q>a/bQ > a / b .
C) Demand is unit elastic when P=a/2bP = a / 2 b .
D) Demand is elastic when Q<a/2bQ < a / 2 b .

Correct Answer:

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