Ray is one of many sellers of furniture in a large city that has many furniture stores. If he tries to raise the price of a sofa even slightly, he loses all of his business to one of his competitors. The demand for Ray's sofas is:
A) perfectly elastic.
B) perfectly inelastic.
C) unit elastic.
D) unit inelastic.

Question

Quizplus · Accepted Answer

Ray's situation describes a perfectly elastic demand, where a small price increase leads to a total loss of customers, indicating that consumers are extremely sensitive to price changes in this market.

Ray Is One of Many Sellers of Furniture in a Large