If a Firm Facing a Perfectly Elastic Demand Curve Raises

question 39

Multiple Choice

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

• 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 decrease to zero
• D)its sales will increase
• E)it is impossible to predict what will happen to its sales

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Definitions:

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A symmetrical bell-shaped graph representing the distribution of a set of data where most occurrences take place around the average.

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A statistical measure indicating the value below which 50% of the observations in a group fall, often used to describe the median of a data set.