A firm facing a ________ demand curve, ceteris paribus, will have zero quantity demanded if it raises its price above the market price.
A) perfectly inelastic
B) relatively elastic
C) relatively inelastic
D) perfectly elastic

Question

Quizplus · Accepted Answer

A firm facing a perfectly elastic demand curve will have zero quantity demanded if it raises its price above the market price because consumers are perfectly price sensitive and will switch to substitutes at any price increase.

A Firm Facing a ________ Demand Curve, Ceteris Paribus, Will