A Perfectly Inelastic Demand Curve Indicates That

question 36

Multiple Choice

A perfectly inelastic demand curve indicates that

• A) a producer can sell as many units as desired at the market price but no units above the market price.
• B) for a given percent change in price, the quantity demanded rises by the same percentage.
• C) price has no effect on the quantity demanded.
• D) the percent change in price is less than the percent change in quantity demanded.

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Definitions:

Capital Goods

Long-term assets like buildings, machinery, and equipment used in the production of goods and services.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, representing the benefits one misses out on when choosing one option over another.

Computer Simulation

The use of computer models to replicate the behavior of complex systems under various scenarios, often for analysis or prediction.

Economic Model

A simplified representation of an economic process or market designed to predict real-world behaviors and outcomes.