A Perfectly Elastic Demand Curve Implies That, Ceteris Paribus

question 14

Multiple Choice

A perfectly elastic demand curve implies that, ceteris paribus:

• A) a firm can sell more by lowering its price
• B) if a firm raises its price even a bit above the market price, it will sell nothing at all
• C) the price a firm charges is irrelevant since it will sell the same amount regardless of the price charged
• D) a firm can raise its price and not lose all its customers

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Definitions:

Usage of Trade

Established customs and practices in a particular industry or market that are widely accepted and used by parties in commercial transactions.

Baker's Dozen

A quantity of thirteen, traditionally used to ensure buyers received good value, originating from bakers adding an extra item to a dozen.

Music Stands

Devices designed to hold sheet music at a comfortable reading angle for musicians during practice or performance.

Violin

A stringed musical instrument that is played with a bow, known for its high pitch and prominence in classical and folk music.