can sell all that it wants at the established market price.
must lower its price to sell additional units of output.Correct
has very low marginal and average costs.
faces perfectly inelastic demand for its product.Incorrect

Explanation
A firm that faces a downward-sloping demand curve is a price setter. Unlike a price taker who can sell all that he wants at the market-determined price, the price setter can sell additional units of output only by lowering his price.