Question

In a perfectly competitive market, the demand curve shows the O A. marginal benefit; marginal cost OB. utility; average cost O C. net benefit; net costs O D. economic surplus, opportunity cost received by consumers and the supplu curve shows the

Answer 1

Since in the perfectly competitive market, the demand curve is price line and firm demand curve is horizontal line.

Hence it can be said that in the perfectly competitive market, the demand curve shows the marginal benefit received by the consumer and supply curve shows the marginal cost.

This is because supply curve is part of MC above the AVC.

Hence option A is the correct answer.