If a Firm Facing a Perfectly Elastic Demand Curve Raises

question 150

Multiple Choice

If a firm facing a perfectly elastic demand curve raises its price,then _____

• A)it will still sell exactly the same amount of output as it did at the lower price.
• B)it will lose some, but not all, of its sales.
• C)its sales will fall to zero.
• D)its sales will increase.
• E)it will improve its market share.

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Definitions:

Sebaceous Gland

A type of gland in the skin that secretes an oily substance called sebum, which lubricates hair and skin.

Hair Follicle

The skin organ that produces hair, consisting of a small tubular cavity containing the root of the hair shaft.

Epidermis

The outer layer of cells covering an organism, the epidermis provides protection against the environment and is involved in water retention.

Dermis

The layer of skin beneath the epidermis, containing nerve endings, sweat glands, and blood vessels, providing strength and elasticity.