If demand for a given good is perfectly elastic, it follows that
a. as price changes, quantity demanded does not change.
b. as price changes, quantity demanded changes by a larger percentage.
c. as price changes only a small percentage, quantity demanded falls to zero.
d. as income changes only a small percentage, quantity demanded changes by a very large percentage.
e. none of the above
Answer: c. as price changes only a small percentage, quantity demanded falls to zero.
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Empirical support for the Heckscher-Ohlin model was weakest when the study applied
A) all of the assumptions of the model. B) all of the assumptions of the model except that regarding technology. C) all of the assumptions of the model except those regarding technology, goods and shipping costs. D) all of the assumptions of the model except those regarding technology, shipping costs and gravity. E) all of the assumptions of the model except those regarding shipping costs.
If the price level rises from 125 to 150 from one year to the next, then the rate of inflation that year is 25 percent.
Answer the following statement true (T) or false (F)