A Good Has a Price Elasticity of Demand Equal to Zero.As

question 21

Multiple Choice

A good has a price elasticity of demand equal to zero.As the price of the good falls,the

• A)total revenue does not change.
• B)quantity demanded does not change.
• C)quantity demanded falls to zero.
• D)total revenue increases.
• E)quantity demanded increases.

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Definitions:

Welfare Loss

Economic inefficiency resulting from a deviation from an optimal allocation of goods and services, often due to externalities or market power.

Net Social Gain

The overall benefit to society from an economic transaction, after subtracting costs.

Barriers To Entry

Factors that make it difficult for new competitors to enter a market.

Net Social Cost

The total monetary cost of the negative externalities produced by an activity or production, minus any benefits.