A Perfectly Elastic Demand Curve

question 118

Multiple Choice

A perfectly elastic demand curve

• A) shows that a slight change in income will lead to a large reduction in price.
• B) is a horizontal line drawn across from the quantity axis.
• C) shows that a slight increase in price will reduce quantity demanded to zero.
• D) has a slope of -1.

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Definitions:

Annual Dividend

The total dividend payment a shareholder receives from a company in one fiscal year, based on the number of shares owned.

Stock Yield

The annual percentage of return that is received from the dividend payments made by a stock, calculated as the annual dividends per share divided by the stock's current price.

4-day SMA

A short-term moving average that calculates the average of the last four days' prices or values in financial analysis.

Closing Prices

The final price at which a security is traded on a given trading day, used for record-keeping and performance evaluation.