If the Demand for a Firm's Output Is Perfectly Elastic,then

question 144

Multiple Choice

If the demand for a firm's output is perfectly elastic,then the firm's Lerner Index equals

• A) zero.
• B) one.
• C) infinity.
• D) one-half.

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Definitions:

Gini Coefficient

A statistical measure of income or wealth distribution within a nation, indicating inequality.

Quantitative Easing

A monetary policy where a central bank buys securities in the open market to increase the money supply and encourage lending and investment.

Reserve Requirement

A regulation set by central banks that determines the minimum amount of reserves that banks must hold against deposits.

Gross National Income

The total domestic and foreign output claimed by residents of a country, consisting of GDP plus factor incomes earned by foreign residents, minus income earned in the domestic economy by nonresidents.