A Perfectly Elastic Demand

question 19

Multiple Choice

A perfectly elastic demand:

• A) means consumers are extremely sensitive to a change in price.
• B) means quantity demanded is unchanged if the price changes by any amount.
• C) is demonstrated by a vertical demand curve.
• D) has a price elasticity of 1.

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Definitions:

Best Case Scenario

An optimistic projection where all conditions and inputs are viewed in the most favorable light, resulting in the highest expected outcome.

Project Analysis

The process of reviewing and evaluating a proposed project to determine its feasibility and potential profitability.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.

Total Costs

The sum of all expenses incurred by a business in producing goods or services, including fixed and variable costs.