If a firm facing a perfectly elastic demand curve raises its price,
A)it will still sell exactly the same amount of output as it did at the lower price
B)it will lose some, but not all, of its sales
C)its sales will decrease to zero
D)its sales will increase
E)it is impossible to predict what will happen to its sales

Question

Quizplus · Accepted Answer

A perfectly elastic demand curve means that consumers are willing to buy any quantity at a specific price, but if the price increases even slightly, the quantity demanded drops to zero.

If a Firm Facing a Perfectly Elastic Demand Curve Raises