Afirm facing a horizontal demand curve group of answer choices a. faces perfectly elastic demand for its product. b. always produces at an output at which p = mr. c. cannot affect the price it receives for its output. d. all of the above are correct.

.D. All of the above are correct.

Explanation:

Option A is correct because when the demand curve is horizontal it means that the demand for the product exists only at one price and an increase in price would cause demand to be 0 and no one will decrease price because they will face losses, so this product has perfectly elastic demand.

Option B is correct because when a firm faces a horizontal demand curve it has no other option but to produce a quantity where Price= Marginal revenue because if a firm keeps price higher than MR then no one will buy the good from them as customers will have substitutes and if they decrease price they will face losses, so when the demand curve is horizontal the firm is a price taker. And because the firm is a price taker and has no effect on the pricing option C is also correct.

There fore all of the above are correct.

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