When a Demand Curve Is Perfectly Elastic

question 28

Multiple Choice

When a demand curve is perfectly elastic:

• A)marginal revenue = average revenue = price.
• B)marginal revenue > average revenue = price.
• C)marginal revenue < average revenue = price.
• D)marginal revenue > average revenue > price.

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Definitions:

Variable Cost Concept

An accounting principle that refers to costs that change in proportion to the level of activity or volume of production.

Rate of Return

The gain or loss of an investment over a specific period, expressed as a percentage of the investment's initial cost.

Production Bottleneck

A point in the manufacturing process where the flow of production is impeded, often leading to delays and reduced efficiency.

Constraint

A limitation or restriction that affects the planning or execution of strategies in business or any other context.