If a firmʹs demand curve is ________, then at the profit-maximizing level of output P = MR = MC.

A) relatively elastic
B) perfectly elastic
C) perfectly inelastic
D) relatively inelastic

Question

If a firmʹs demand curve is ________, then at the profit-maximizing level of output P = MR = MC.A)  relatively elasticB)  perfectly elasticC)  perfectly inelasticD)  relatively inelastic

RIlIBE GAMING · Accepted Answer

Final Answer : B, Explanation :  When a firm's demand curve is perfectly elastic, it means that the firm can sell as much as it wants at the prevailing market price, but cannot charge a higher price. This results in the condition where price (P) equals marginal revenue (MR) and, at the profit-maximizing level of output, equals marginal cost (MC) as well.

If a firmʹs demand curve is ________, then at the profit-maximizing level of output P = MR = MC.

A) relatively elastic
B) perfectly elastic
C) perfectly inelastic
D) relatively inelastic

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