If the demand curve a monopolist faces is perfectly elastic,then the ratio of the firm's price to the marginal cost is
A) 0.
B) 1.
C) 2.
D) None of the above-the answer cannot be determined.

Question

Quizplus · Accepted Answer

When the demand curve a monopolist faces is perfectly elastic, it means the firm is a price taker and must sell at the market price. Therefore, the price equals the marginal cost, making the ratio of the firm's price to the marginal cost equal to 1.

If the Demand Curve a Monopolist Faces Is Perfectly Elastic,then