Homework Answers
Correct option: (D) Perfectly elastic
Reason: In case of perfectly competitive market, the individual firms are price takers. The price in the industry is calculated by the market demand and supply forces. Since the price is fixed for the entire industry, all firms take price as given and have to offer the same market price to all its customers.
In case any firm decides to increase its price, it will face zero demand because all consumers will switch to other sellers offering a lower price.
In case any firm decides to decrease its price, it will face loss (since P = MC)
Thus, it means each individual firm faces a perfectly elastic demand curve because there are many sellers in the market selling the same product at the same price.
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the
demand curve faced by a perfectly competitive firm is
horizontal
yes
it a true or false question
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An individual firm in a perfectly competitive market will face demand. Upward sloping Perfectly inelastic Perfectly...
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the
demand curve faced by a perfectly competitive firm is
horizontal
yes
it a true or false question
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An individual firm in a perfectly competitive market will face demand. Perfectly inelastic Upward sloping Perfectly elastic Cannot be determined from the information Downward sloping Considering jackets and sweaters, to graph an Engel curve of jackets what must be true? The price of sweaters changes The price of jackets changes Income changes Cannot be determined from the information O Utility is held constant
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