Macmillan Learning Determine whether each of the statements given is true or false. Truc Answer Bank When supply is perfectly inelastic, a change in demand has no effect on the price. A key consideration as to whether the price elasticity of supply is elastic or inelastic is whether the good supplied is a luxury item. False The short-run elasticity of supply is larger than the long-run elasticity of supply because changes in equilibrium will adjust elasticity accordingly. When the price increases, total revenue always increases because of the price effect. A Swiffer floor sweeper and a broom would have a positive cross-price elasticity of demand.

Macmillan Learning Determine whether each of the statements given is true or false. Truc Answer Bank When supply is perfectly inelastic, a change in demand has no effect on the price. A key consideration as to whether the price elasticity of supply is elastic or inelastic is whether the good supplied is a luxury item. False The short-run elasticity of supply is larger than the long-run elasticity of supply because changes in equilibrium will adjust elasticity accordingly. When the price increases, total revenue always increases because of the price effect. A Swiffer floor sweeper and a broom would have a positive cross-price elasticity of demand.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: The price of coffee rose sharply last month, while the quantity sold remained the same. Five people...

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