The Perfectly Elastic Demand Curve Faced by a Competitive Firm

question 11

Multiple Choice

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

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

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