Suppose Demand Is Perfectly Elastic,and the Supply of the Good

question 277

Multiple Choice

Suppose demand is perfectly elastic,and the supply of the good in question decreases.As a result,

• A)the equilibrium quantity decreases,and the equilibrium price is unchanged.
• B)the equilibrium price increases,and the equilibrium quantity is unchanged.
• C)the equilibrium quantity and the equilibrium price both are unchanged.
• D)buyers' total expenditure on the good is unchanged.

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Definitions:

Unusual Item

A significant transaction or event that is infrequent in nature, distinct from the ordinary activities of the business.

Current Operations

Relates to the primary activities that a business performs to earn revenue within its normal business cycle.

Accounting Methods

Systems that companies use to record their financial transactions, such as cash basis and accrual basis accounting.

Comparable Data

Information or statistics that are sufficiently similar in nature to serve as a basis for comparison in analytical or valuation efforts.