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In a Price Taker's Market, How Does the Elasticity of the Market

Question 39

Multiple Choice

In a price taker's market, how does the elasticity of the market demand curve compare with the elasticity of a single firm's demand curve?


A) Both demand curves have the same elasticity.
B) The firm's demand curve is perfectly elastic, while the elasticity of demand at the industry level varies along a downward-sloping curve.
C) The firm's elasticity of demand varies along a downward-sloping curve, while the industry demand curve is perfectly elastic.
D) Both demand curves are perfectly elastic.

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