If a Firm Faces a Perfectly Elastic Demand for Its

question 43

Multiple Choice

If a firm faces a perfectly elastic demand for its product,then

• A)it is not a price taker.
• B)it will want to lower its price to increase sales.
• C)it will want to raise its price to increase total revenue.
• D)its marginal revenue curve is horizontal at the market price.
• E)it will always make zero economic profit.

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Definitions:

Raw Materials

The unprocessed or minimally processed resources used to produce goods or products, typically extracted from natural sources.

Finished Products

Goods that have completed the manufacturing process and are ready for sale or distribution to customers.

5Ss

A workplace organization methodology focusing on standardizing procedures and optimizing cleanliness and order, originating from five Japanese terms: Seiri, Seiton, Seiso, Seiketsu, and Shitsuke.

Lean Operations

Eliminate waste through a focus on exactly what the customer wants.