Question
The demand curve facing a perfectly competitive firm is
Answer: Option A
Answer: (a)
A perfectly competitive industry is comprised of a large number of relatively small firms that sell identical products.
Each perfectly competitive firm is so small relative to the size of the market that it has no market control, it has no ability to control the price.
In other words, it can sell any quantity of output it wants at the going market price. This translates into a horizontal or perfectly elastic demand curve.
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Answer: (a)
A perfectly competitive industry is comprised of a large number of relatively small firms that sell identical products.
Each perfectly competitive firm is so small relative to the size of the market that it has no market control, it has no ability to control the price.
In other words, it can sell any quantity of output it wants at the going market price. This translates into a horizontal or perfectly elastic demand curve.
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