A Perfectly Inelastic Demand Means

question 23

Multiple Choice

A perfectly inelastic demand means:

• A) consumers will change the quantity they purchase when price changes.
• B) demand will drop to zero if the price increases by any amount.
• C) consumers will not change the quantity they purchase when price changes.
• D) the demand curve is perfectly horizontal.

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Definitions:

Variable Costs

Costs that change in proportion to the amount of goods or services produced.

Average Total Cost

The sum of all production costs divided by the quantity of output produced, yielding the cost per unit on average.

Output

The complete sum of products or services created by an enterprise, field, or economic entity.

Marginal Cost

The cost of producing one additional unit of a good or service, a critical concept for understanding economic decision-making and pricing strategies.