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The Industry Elasticity of Demand for Good X Is −1

Question 86

Multiple Choice

The industry elasticity of demand for good X is −1.5,while the elasticity of demand for an individual manufacturer of good X is −9.Based on this information,the Rothschild index of market power is:


A) 1/6, indicating there is little monopoly power in this industry.
B) 1/6, indicating there is significant monopoly power in this industry.
C) 6, indicating there is little monopoly power in this industry.
D) None of the answers are correct.

Correct Answer:

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