The demand curve of a perfectly competitive firm is __________,while the demand curve of a monopolist is __________.
A) perfectly elastic;downward-sloping
B) vertical;downward-sloping
C) perfectly elastic;perfectly inelastic
D) perfectly inelastic;perfectly elastic
E) perfectly elastic;elastic

Question

Quizplus · Accepted Answer

A perfectly competitive firm faces a perfectly elastic demand curve because it is a price taker and has no control over the market price. On the other hand, a monopolist faces a downward-sloping demand curve because it has some degree of control over the price and can increase the price by decreasing the quantity supplied.

The Demand Curve of a Perfectly Competitive Firm Is __________,While