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Which of the following is stated in the passage about basic economic models?
The passage states that basic economic models are not true in all economic situations, including - but not limited to - price elasticity of demand. In other words, there may be other cases in which the basic economic models are inapplicable.
The passage states that basic economic models do not hold true in all economic scenarios but does call them invalid.
The passage tells us that the opposite is true:
demand (number of consumers)
is a function of (i.e., is determined by)
price (cost to the consumer).
Even though we know that basic economic models do not hold in every situation, the passage states that they see demand as a function of price - there is no reference to cases in which such models do not follow this rule.
The passage explicitly states that demand is a function of (i.e., is determined by) price.