Asked by Chris Turner on Jul 07, 2024
Verified
A perfectly elastic demand curve implies that the firm:
A) must lower price to sell more output.
B) can sell as much output as it chooses at the existing price.
C) realizes an increase in total revenue that is less than product price when it sells an extra unit.
D) is selling a differentiated (heterogeneous) product.
Perfectly Elastic
A situation in which the quantity demanded or supplied responds infinitely to changes in price.
Existing Price
The current market price at which a good or service can be bought or sold.
- Acquire an understanding of how elasticity of demand operates in exclusively competitive markets.
Verified Answer
RK
Rajiv KumarJul 13, 2024
Final Answer :
B
Explanation :
A perfectly elastic demand curve means that consumers are willing to buy an unlimited amount of the good at a specific price. Therefore, the firm can sell as much output as it chooses at the existing price without needing to lower the price to sell more.
Learning Objectives
- Acquire an understanding of how elasticity of demand operates in exclusively competitive markets.