A perfectly elastic demand curve
A. has a slope of -1.
B. shows that a slight change in income will lead to a large reduction in price.
C. shows that a slight increase in price will reduce quantity demanded to zero.
D. is a vertical line drawn across from the quantity axis.
Answer: C
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When a transfer price is set lower
a. the buying division will want to sell less to the selling division b. the buying division will want to sell more to the selling division c. the selling division will want to sell less to the buying division d. the selling division will want to sell more to the buying division
Knowing that the demand for wheat is inelastic, if all farmers voluntarily did not plant wheat on 10 percent of their land, then
a. consumers of wheat would buy more wheat. b. wheat farmers would suffer a reduction in their total revenue. c. wheat farmers would experience an increase in their total revenue. d. the demand for wheat would decrease.