The demand curve facing a perfectly competitive firm is
A) the same as the market demand curve.
B) downward-sloping and less flat than the market demand curve.
C) downward-sloping and more flat than the market demand curve.
D) perfectly horizontal.
E) perfectly vertical.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm is a price-taker, meaning it cannot influence the market price. Therefore, the demand curve facing a perfectly competitive firm is perfectly horizontal, as any increase in price would result in the loss of all customers to other firms in the market.

The Demand Curve Facing a Perfectly Competitive Firm Is