What is the nature of the elasticity of the demand curve faced by perfectly competitive firm?

Question

Quizplus · Accepted Answer

The demand curve faced by a perfectly competitive firm is perfectly elastic because it is a price taker in the market. This means that the firm has to accept the market price for its product and any increase in its price above the market price would result in a loss of all customers. Similarly, any decrease in price would result in an increase in quantity demanded but not the price, as the market price is already established. Thus, the demand curve is a horizontal line at the market price, and any quantity can be sold at that price.

What Is the Nature of the Elasticity of the Demand