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A relatively horizontal demand curve indicates that consumers are highly responsive to price changes, meaning that small decreases in price can lead to significant increases in quantity demanded. This elasticity suggests that the product has many substitutes or that it is a non-essential good, where price fluctuations greatly influence consumer behavior. While not completely flat, a relatively horizontal curve shows that demand can vary widely with price changes, highlighting the sensitivity of consumers to price variations.
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Draw a demand curve illustrating price inelastic demand and explain how the curve relates to the definition of price elasticity of demand?
A perfectly inelastic demand curve will be completely horizontal and means that consumers would any price for a particular good, which is almost impossible. The closer to being horizontal a demand curve is, the more inelastic the demand.
Why demand curve is horizontally curved?
Horizontal
Why The horizontal axis of a demand curve displays?
elasticity
The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
Does monopolistically competitive firms have horizontal marginal cost curve?
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
Draw a demand curve illustrating price inelastic demand and explain how the curve relates to the definition of price elasticity of demand?
A perfectly inelastic demand curve will be completely horizontal and means that consumers would any price for a particular good, which is almost impossible. The closer to being horizontal a demand curve is, the more inelastic the demand.
Why demand curve is horizontally curved?
Horizontal
Why The horizontal axis of a demand curve displays?
elasticity
What does the demand curve state?
As price (on the horizontal) increases, demand (on the vertical) will decrease.
The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
Does monopolistically competitive firms have horizontal marginal cost curve?
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
The horizontal sum of all individual demand curves is known as?
The MArket Demand Curve
Which of the following statements does not describe the demand curve?
Quantities demanded are listed on the horizontal axis
A demand curve which is parallel to the vertical axis is?
When the demand curve is horizontal to the x axis, it is said to be elastic and therefore more responsive to changes in price. When the demand curve is vertical, it is more inelastic and consumers will be more apt to purchase a good regardless of the price.
Explain the difference between elasticity of demand and the slope of a demand curve?
The demand curve is drawn with price on the vertical axis and quantity demanded on the horizontal axis. Mathematically, the slope of a curve is represented by rise over run, or the change in the variable on the vertical axis divided by the change in the variable on the horizontal axis. Therefore, the slope of the demand curve represents change in price divided by change in quantity. Elasticity, on the other hand, aims to quantify the responsiveness of demand and supply to changes in price, income, or other determinants of demand.
What does a flat line mean in a demand curve?
If a market is faced with a horizontal demand curve, then the demand in that market by consumers is perfectly elastic. More simply, any minuscule change in price causes a huge change in quantity demanded.
Why does a Perfect Competition firms demand curve is also its marginal revenue curve?
AnswerFor a perfectly competitive firm with no market control, the marginal revenue curve is a horizontal line. Because a perfectly competitive firm is a price taker and faces a horizontal demand curve, its marginal revenue curve is also horizontal and coincides with its average revenue (and demand) curve. Yes - what you must remember is that a firm's demand curve in perfect competition is its average revenue curve. Average revenue = price x quantity / quantity = price. The demand curve shows the quantity demanded at varying prices and this is exactly what the average revenue curve will do.Because there are so many sellers in the market, no one firm has enough market power to influence price (if a firm tried to raise price consumers would move to different suppliers; nobody would buy the good), therefore price is determined by industry supply and demand, and a firm can produce any quantity at this price . This means that the firm faces a horizontal average revenue (demand curve) and if average revenue is constant, this means total revenue is increasing at a constant rate, and therefore marginal revenue is constant as well.
