The Figure Given Below Shows the Aggregate Demand and Supply

question 105

Multiple Choice

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-If a firm has a perfectly elastic demand curve, then:

• A)it must be a monopoly firm.
• B)it can charge any price it desires.
• C)the firm has significant market power.
• D)the firm has no market power.
• E)the firm should shut down.

---

Definitions:

Comparative Advantage

The principle that holds a party can produce some goods at a lower relative cost than another, promoting beneficial trade.

Other Goods

The term refers to any goods that are not directly under consideration but can still affect the market situation, such as substitute or complementary goods.

Increasing Opportunity

Increasing opportunity involves the growth or expansion of choices and avenues through which individuals or organizations can achieve desired goals or outcomes.

Production Possibilities Curves

A graphical representation showing the maximum combination of goods and services that can be produced within a set timeframe with available resources.