Suppose the market for hot pretzels in New York City is perfectly competitive. What is true of demand in this market?
a. The demand curve facing each seller is perfectly elastic.
b. The demand curve facing each seller is perfectly inelastic.
c. The market demand curve is perfectly elastic.
d. The market demand curve is perfectly inelastic.
e. The market demand curve is elastic.
A
You might also like to view...
Other things being equal, the lower the value of elasticity:
A. the more likely the profitability of a price increase. B. the less likely the profitability of a price increase. C. the greater the responsiveness in quantity demanded to a price change. D. the lower the corresponding increase in firm revenue.
In monopolistic competition, profit is maximized by producing so that marginal revenue
A) equals price. B) is negative. C) equals marginal cost and which are less than price. D) equals average total cost but not marginal cost. E) equals marginal cost and equals price.