Define elasticity - marginal cost, Cost Accounting

1) Define Elasticity.  If you have a product where elasticity is less than one, what does that mean?  Is it good, bad for the firm?

2) Why will firms not shut down as soon as the price of their product drops below the Marginal cost?  At what point will most firms go out of business (shut-down) and why?

Posted Date: 3/28/2013 3:10:21 AM | Location : United States

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