If the demand curve for a firm's output is perfectly elastic, then the firm is
A) a monopolist.
B) perfectly competitive.
C) an oligopolist.
D) monopolistically competitive.

Question

Quizplus · Accepted Answer

When the demand curve for a firm's output is perfectly elastic, it means that the firm can sell any quantity of its product at the prevailing market price but cannot influence the price by altering the quantity it supplies. This is characteristic of a perfectly competitive market, where there are many sellers offering identical products, and no single seller has any market power to set prices.

If the Demand Curve for a Firm's Output Is Perfectly