A Supply Curve That Is Parallel to the Horizontal Axis

question 111

Multiple Choice

A supply curve that is parallel to the horizontal axis suggests that

• A)the industry is organized monopolistically.
• B)the relationship between price and quantity supplied is inverse.
• C)a change in demand will change price in the same direction.
• D)a change in demand will change the equilibrium quantity but not price.

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Definitions:

Demographic Transition Theory

A theory that describes the transition from high birth and death rates to low birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Modernization Theory

A perspective that views the process of societal change towards adopting the characteristics of industrialized societies as inevitable and positive, associating it with economic growth and development.

Industrialization

The process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods. Individual manual labor is often replaced by mechanized mass production.