A Relatively Flat Demand Curve Indicates That

question 25

Multiple Choice

A relatively flat demand curve indicates that

• A)quantity demanded will adjust only slightly to a price change.
• B)quantity demanded will adjust significantly to a price change.
• C)quantity demanded will not adjust to a price change.
• D)the change in quantity demanded will exactly equal a change in price.

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Definitions:

Decreasing Returns

A principle where an increase in the amount of one factor of production, while other factors are held constant, results in a lower ratio of output per input.

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the incremental output will eventually decrease.

Scale

The size or level of something, often used to describe the scope of a business operation or production.

Increasing Returns

A situation in production where the output increases by a proportion greater than the increase in inputs, often leading to economies of scale.