A Price Elasticity of Infinity Corresponds to a Demand Curve

question 155

Multiple Choice

A price elasticity of infinity corresponds to a demand curve that is:

• A)Horizontal
• B)Downward sloping with a slope always equal to 1.
• C)Vertical
• D)Either vertical or horizontal.

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Definitions:

Activity Base

A measure or factor used for allocating costs to activities, typically driving the amount of expense incurred in producing a product or providing a service.

Service Departments

Units within an organization that provide support services to other departments but do not directly contribute to revenue generation.

Return On Investment

A measure used to evaluate the profitability of an investment, calculated as a ratio of net profit to the initial cost of the investment.

Invested Assets

Assets that are purchased or acquired for the purpose of generating income or appreciating in value, such as stocks, bonds, and real estate.