Demand for a good is affected by the price, and the type of good. If the price is an inferior good the demand decreases when the price goes down, and vice versa for a normal good. So we can say for certain that a price change will always affect demand. So the answer is A.
Answer:
curvilinear relationship
Explanation:
Based on the information provided within the question it can be said that this is an example of a curvilinear relationship. This term refers to a type of relationship between two variables in which, when one increases the other one does as well, up until a set point. Once the first variable hits that point it can continue to increase but the second variable will begin to decrease. In this scenario the market can continue to grow and will cause the new product to grow as well, but once the market becomes saturated with similar products, the sales of the product will start to decline even though the market is still growing.
Option c.) is more elastic than the demand curve facing a perfectly competitive firm as the demand curve or the AR curve of a perfectly competitive firm is parallel to the horizontal axis, perfect elastic is the correct answer.
This means that the company does not control the price. The company assumes a price and sells the quantity of the product at that price. In a perfectly competitive market, a single firm faces a demand curve with infinite elasticity. In a perfectly competitive market, firms do not fix prices, but choose levels of production at which marginal costs equal market prices.
Under conditions of perfect competition, a firm can sell any quantity of goods at the prevailing price, so the firm's demand curve is perfectly elastic. So even a small price increase will result in zero demand. This suggests that the company does not control prices.
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