When one studies demand and supply curves on a graph and the law of supply and demand, the demand curve goes from left to right and the supply curve goes from right to left. The X-axis denotes the quantity of a good or a service and the Y-axis denotes the price. The point at whic...
Whenonestudiesdemandandsupplycurvesonagraphandthelawofsupplyanddemand,thedemandcurvegoesfromlefttorightandthesupplycurvegoesfromrighttoleft.TheX-axisdenotesthequantityofagoodoraserviceandtheY-axisdenotestheprice.ThepointatwhichthedemandcurveandthesupplycurvemeetisknownasthePointofEquilibrium,andthisdenotestheamounto...
Answer and Explanation:1 This statement istrue. Perfectly inelastic demand is depicted by a vertical demand curve. This vertical demand curve is the illustration of a market... Learn more about this topic: Inelastic Demand | Definition, Graph & Examples ...
If the price elasticity of supply is equal to zero, then supply is perfectly inelastic. a. True. b. False. True or False: The demand curve facing a monopolistically competitive firm is elastic. The goal of the firm's owner is to make it nearly inelastic. Explain. The so...
If supply is perfectly elastic, it means that any change in price will result in an infinite amount of change in quantity. ... Perfect elastic demand means thatquantity demanded will increase to infinity when the price decreases, and quantity demanded will decrease to zero when price increases....
If a firm increases the output it sells, the price will not decrease because each firm is too small to shift the market supply curve enough to lower equilibrium price. 2. Explain how a perfect competitor decides how much to produce. To make profit as large as possible, a firm will ...
A perfectly elastic demand curve ishorizontal, as shown in Figure 2, below. While it's difficult to think of real world example of infinite elasticity, it will be important when we study perfectly competitive markets. It's a situation where consumers are extremely sensitive to changes in price...
(Of course the supply curve also includes the graph’s origin.) 3. Since the demand curve for a perfectly competitive firm is horizontal, it has a zero slope. In long-run equilibrium the firm will earn zero economic profit. For this to be true, price must equal average total cost. ...
This implies that the firm faces a perfectly elastic demand curve for its product: buyers are willing to buy any number of units of output from the firm at the market price. When the perfectly competitive firm chooses what quantity to produce, then this quantity—along with the prices ...
What is an elastic demand curve shaped look like? Define Price Elasticity of Supply. Define the price elasticity of supply. Name a good for which demand is elastic. Why is quantity demanded so sensitive to price? Assume the price elasticity of demand for a good is 1.5. a.) I...