The long-run supply curve would be perfectly elastic when
A)an increase in demand does not cause a change in product price.
B)an increase in demand causes an increase in product price.
C)a decrease in demand causes an increase in short-run supply.
D)a decrease in demand causes an increase in product price.

Question

Quizplus · Accepted Answer

In the long run, a perfectly elastic supply curve means that any change in demand does not affect the product price, as firms can enter or exit the market freely, maintaining the price at a constant level.

The Long-Run Supply Curve Would Be Perfectly Elastic When