The Perfectly Elastic Demand Curve Faced by a Competitive Firm

question 60

Multiple Choice

The perfectly elastic demand curve faced by a competitive firm means that

• A)the firm could increase total revenue by increasing the price.
• B)it could actually sell an infinite amount of output at the going price.
• C)the product's price will be unaffected by any realistic change in the firm's level of output.
• D)total revenue is constant regardless of quantity produced.
• E)as the firm expands output its marginal revenue will fall.

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