Question

1 points Save Answer All along the beach in San Diego, California are shops which rent boogie boards by the hour. Tourists perceive that all rental boogie boards are identical, all prices are clearly listed on signs in front of the shops, and there are no restrictions on entry and exit in the boogie board market. Suppose Surf's Up is a boogie board rental shop. What is the shape of Surf's Up's demand curve as compared to the market demand curve? Surf's Up's demand curve is horizontal and the market demand curve is downward sloping. Surf's Up's demand curve is vertical and the market demand curve is upward sloping Surf's Up's demand curve is horizontal and the market demand curve is upward sloping Surf's Up's demand curve is vertical and the market demand curve is downward sloping.

Answer 1

Answer

Surf's Up's demand curve is horizontal and the market demand curve is downward sloping.

This market is a perfectly competitive markety, thus the firms demand curve will be horizontal i.e perfectly inelastic, where as the market demand curve will be downward slowping.

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