The Home Import Demand Curve Is Downward Sloping Because

question 104

Multiple Choice

The home import demand curve is downward sloping because:

• A) as the government forces the price down, consumers buy more.
• B) foreign companies want to help domestic competitors.
• C) as the price falls below domestic equilibrium, the shortage in demand is filled by importing more quantity from abroad.
• D) consumers can control the price of the good.

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Definitions:

Perfectly Elastic

A demand situation where a small change in price leads to an infinite change in the quantity demanded.

Price-Elasticity Of Demand

A way to quantify the effect price changes have on the demand for a good.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specified period.

Price Elasticity Of Demand

A measure reflecting how price adjustments influence the demand quantity of a good.