In a perfectly competitive market, firm level demand is:
A) flat.
B) vertical.
C) positively sloped.
D) negatively sloped.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, each firm is a price taker and has no control over the price of the product. Therefore, the demand curve faced by the firm is perfectly elastic, which means that the firm can sell any amount of output at the prevailing market price. As a result, the firm-level demand is flat or horizontal.

In a Perfectly Competitive Market, Firm Level Demand Is