If the demand curve is perfectly elastic, and if the price of the good is increased by 10 percent by the seller, then revenue from the sale of the good would
A. remain constant.
B. fall to zero.
C. increase by 10 percent.
D. decrease by 10 percent.
Answer: B
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Which of the following is the best test of whether a government program should be undertaken?
a. approval by a majority in each of the two branches of Congress b. the total number of jobs created by the program c. the increase in GDP as a result of the government program d. value generated by the government program that exceeds the value of the production it crowds out
Which of the following is likely to be present in a perfectly competitive market?
a. patents b. government licenses c. nonprice competition such as advertising d. high capital costs e. firms producing identical products
If Donald receives a pay raise and the income effect outweighs the price effect on his labor supply decisions, he will work:
A. less hours initially but eventually work more. B. more hours. C. the same amount. D. less hours.
The value of marginal product curve is downward sloping because:
A. profits decline as more workers are hired. B. firms must lower price to sell more. C. of the law of diminishing returns. D. at lower wages, only less qualified workers are available.