A Perfectly Inelastic Demand Is One in Which The

question 91

Multiple Choice

A perfectly inelastic demand is one in which the:

• A) demand curve is perfectly vertical.
• B) demand curve is perfectly horizontal.
• C) measured elasticity is exactly 1.
• D) response to a change in price is immediate.

---

Definitions:

Flotation Costs

Costs a company bears when issuing new securities, covering underwriting fees, legal expenses, and registration charges.

Constant Growth

A situation where an economic, financial, or business variable grows at a steady and unvarying rate over time.

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but kept within the company for reinvestment or to pay off debt.

Marginal Tax Rate

The tax rate applied to an additional dollar of income, representing the rate at which your next dollar of income will be taxed.