A perfectly competitive firm's demand curve is perfectly elastic at the market-determined price.

Question

Quizplus · Accepted Answer

In perfectly competitive markets, the demand curve faced by a firm is perfectly elastic at the market-determined price because the firm is too small to affect the market price and must accept the market price as given. This means that the firm can sell as much output as it wants at the market price, but cannot sell any output at a higher price.

A Perfectly Competitive Firm's Demand Curve Is Perfectly Elastic at the Market-Determined