Figure 3 shows two demand curves at price = P*. Which of the following is most likely to explain the shapes of demand curve correctly?
Demand on A is more elastic.
If both A and B represent the same product, then A is for short-run demand and B is for long-run demand.
A has more substitutes.
B has a smaller share in consumers’ expenditure (budget).Question 11
Demand on your Economics textbook is quite price-inelastic because
it has no close substitute.
it is expensive.
it costs a huge share in students’ budget.
it takes a whole semester to consume.Question 12
In the long-run equilibrium, the existing perfectly competitive firms
always earn a positive economic profit.
never earn a normal profit.
sell products at the market price which equals their minimum average total cost .
still operate with negative economic profits.