A perfectly competitive firm with a random demand has an expected demand curve that is its expected price.

Question

Quizplus · Accepted Answer

In perfect competition, the firm is a price taker, meaning it has no control over the price and must accept the market price. With a random demand, the firm cannot predict the exact quantity of demand at any given price, but it can predict the expected demand at each price. Since the firm must accept the market price, its expected demand curve becomes its expected price. Therefore, the answer is A) equal to.

A Perfectly Competitive Firm with a Random Demand Has an Expected