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The Perfectly Elastic Demand Curve Faced by a Competitive Firm

Question 3

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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