Asked by Muhammad Ahmed on May 26, 2024
Verified
A firm can sell as much as it wants at a constant price. Demand is thus
A) perfectly inelastic.
B) perfectly elastic.
C) relatively inelastic.
D) relatively elastic.
Perfectly Elastic
A state of demand or supply in which the quantity demanded or supplied changes infinitely in response to any change in price.
Constant Price
An economic term that refers to prices that have been adjusted for inflation, allowing for comparison of purchasing power over time.
- Differentiate elastic, inelastic, and unitary demand.
- Learn the connection between demand curve gradient and elasticity of demand.
Verified Answer
AW
Antonio WortherlyMay 26, 2024
Final Answer :
B
Explanation :
Perfectly elastic demand means that consumers are willing to purchase any quantity of the product at a certain price, but no more if the price increases, which aligns with the scenario where a firm can sell as much as it wants at a constant price.
Learning Objectives
- Differentiate elastic, inelastic, and unitary demand.
- Learn the connection between demand curve gradient and elasticity of demand.