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 a situation where an increase in demand does not cause a change in product price, the long-run supply curve is perfectly elastic. This implies that suppliers can meet any level of demand at the same price, indicating perfect elasticity.

The Long-Run Supply Curve Would Be Perfectly Elastic When