A firm operating in a purely competitive resource market faces a resource supply curve that is
A) perfectly inelastic.
B) perfectly elastic.
C) highly inelastic.
D) highly elastic.

Question

Quizplus · Accepted Answer

In a purely competitive resource market, the firm is a price taker and the resource supply curve is perfectly elastic. This is because the firm can purchase any amount of the resource at the market price without affecting the price itself.

A Firm Operating in a Purely Competitive Resource Market Faces