The shape of the perceived demand curve for a perfectly competitive firm reflects that firm's ability to
A) sell any quantity it wishes at the prevailing market price.
B) raise its price without losing all of its customers.
C) choose any combination of price and quantity.
D) lose fewer customers than a monopoly that raised its prices.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers, meaning they can sell any quantity of their product at the market's prevailing price but cannot influence the price themselves. This is why the demand curve for a perfectly competitive firm is perfectly elastic, reflecting their ability to sell any quantity at the market price.

The Shape of the Perceived Demand Curve for a Perfectly