If a firmʹs demand curve is ________, then at the profit-maximizing level of output P = MR = MC.
A) relatively elastic
B) perfectly elastic
C) perfectly inelastic
D) relatively inelastic

Question

Quizplus · Accepted Answer

When a firm's demand curve is perfectly elastic, it means that the firm can sell as much as it wants at the prevailing market price, but cannot charge a higher price. This results in the condition where price (P) equals marginal revenue (MR) and, at the profit-maximizing level of output, equals marginal cost (MC) as well.

If a Firmʹs Demand Curve Is ________, Then at the Profit-Maximizing