If the Demand Curve for a Product Is Vertical, Then

question 305

Multiple Choice

If the demand curve for a product is vertical, then

• A) the demand for the good is perfectly elastic.
• B) consumers are highly responsive to price changes.
• C) its price elasticity of demand is equal to zero.
• D) consumers may purchase all they want to at the established market price.

---

Definitions:

Acquisition Differential

Refers to the difference between the purchase price of an asset and its fair market value at the time of acquisition.

Equity Method

An accounting technique used to record investments in associate companies, where the investment's value is adjusted to reflect the investor's share of the associates' profits or losses.

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and equity of a parent company and its subsidiaries, presenting them as a single entity.

Land Account

An account on the balance sheet that represents the cost of land owned by a company. Unlike other fixed assets, the land is not depreciated.