For a perfectly competitive firm,the demand curve is horizontal at the price determined in the market.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, a firm is a price taker, which means that it has no control over the price of the product it sells. The demand curve faced by a perfectly competitive firm is therefore perfectly elastic (horizontal) at the prevailing market price, since the firm can sell as much as it wants at that price without affecting the market price. Therefore, the statement is true.

For a Perfectly Competitive Firm,the Demand Curve Is Horizontal at the Price