A monopolist can either sell 100 units for $3 each or sell 160 units for $2 each.This implies that,for the given range of output,elasticity of demand for the monopolist's product is _____
A)greater than one but not infinite.
B)one.
C)zero.
D)less than zero.
E)infinite.

Question

Quizplus · Accepted Answer

Elasticity of demand is greater than one but not infinite as the change in price ($1) is greater than the change in quantity demanded (60 units) between the two options given. Therefore, the demand for the product is relatively responsive to changes in price.

A Monopolist Can Either Sell 100 Units for $3 Each