A Horizontal Demand Curve Indicates That

question 116

Multiple Choice

A horizontal demand curve indicates that:

• A) quantity demanded will rise if the price increases by any amount.
• B) quantity demanded will drop to zero if the price increases by any amount.
• C) quantity demanded will remain unchanged no matter what happens to the price.
• D) price is not important in this market.

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Definitions:

World Price

The price of a good or service on the international market, shaped by the global forces of supply and demand.

Domestic Price

The cost of products or services in a country, affected by domestic demand and supply factors.

Tariff

A tax or duty to be paid on a particular class of imports or exports, often used as a tool for trade policy.

Quota

A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specified time period.