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.

Question

Quizplus · Accepted Answer

A perfectly elastic demand curve means that consumers are willing to buy any quantity of the product at a given price, but no more if the price increases. Therefore, the firm can sell as much as it wants at the existing price without having to lower it.

A Perfectly Elastic Demand Curve Implies That the Firm