Assume the marginal revenue from each additional unit of a good sold is 0.In this case,we can conclude that demand for the good is:
A)unit elastic
B)perfectly elastic.
C)perfectly inelastic.
D)relatively inelastic.

Question

Quizplus · Accepted Answer

If the marginal revenue from each additional unit of a good sold is 0, it implies that any increase in the quantity sold will not lead to an increase in revenue. In such a scenario, the demand for the good is said to be perfectly elastic as the slightest increase in the price will lead to a complete loss of customers. This happens in a market where there are surplus suppliers of the same product, and buyers can easily switch between suppliers to get the best price. Therefore, option B is the best choice.

Assume the Marginal Revenue from Each Additional Unit of a Good