Asked by DeNae Schoel on May 25, 2024
Verified
If the equation for the demand curve is q 50 4p, then the ratio of marginal revenue to price is constant as price changes.
Marginal Revenue
The increase in revenue that results from the sale of one additional unit of product or service.
Demand Curve
A graph depicting the relationship between the price of a good or service and the quantity demanded for a given period, typically showing a downward slope from left to right.
- Absorb the doctrine and formulaic calculation of demand's price elasticity.
Verified Answer
NE
Nikki EstersMay 26, 2024
Final Answer :
False
Explanation :
The ratio of marginal revenue to price is not constant as price changes for a demand curve with a constant slope. The equation given for the demand curve shows a decreasing absolute value of the slope, indicating that the ratio of marginal revenue to price would also decrease as price increases.
Learning Objectives
- Absorb the doctrine and formulaic calculation of demand's price elasticity.