Question

Which of the following statements is incorrect?

A. If a firm decreases the price of its product, its total revenue will decrease
B. The own price elasticity of demand is constant at all points along a linear demand curve
C. As the price of X falls and we move down an individual's demand curve for X, the money income of the individual also changes
D. all of the above are incorrect

Answer 1

The incorrect statement is: B. The own price elasticity of demand is constant at all points along a linear demand curve.

Step-by-step explanation:

The incorrect statement is:

B. The own price elasticity of demand is constant at all points along a linear demand curve.

The own price elasticity of demand measures the responsiveness of quantity demanded to a change in price. Along a linear demand curve, the elasticity will vary at different points. In general, price elasticities of demand are negative numbers indicating that the demand curve is downward sloping, but we read them as absolute values.