Which of the Following Is True of a Good with a Perfectly

question 55

Multiple Choice

Which of the following is true of a good with a perfectly elastic supply?

• A) Any increase in the price of the good will lead to a decrease in the seller's revenue.
• B) Any increase in the price of the good will decrease the quantity supplied of the good by more than the price change.
• C) Any increase in the price of the good will induce a firm to supply its maximum possible quantity of the good.
• D) Any increase in the price of the good will increase the quantity supplied of the good exactly by an amount equal to the price change.

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Definitions:

Quantity Demanded

The quantity demanded is the amount of a good or service that consumers are willing and able to purchase at a given price, holding all else constant.

Price

The amount of money required to purchase a good, service, or asset, often influenced by factors like supply and demand.

Demand Increase

A situation in which the desire for a product or service rises, leading to a higher quantity being demanded at a given price.

Demand Decrease

A reduction in the quantity of a good or service that consumers are willing and able to purchase at a given price.