A firm in a competitive market sells a product that has many substitutes.This means the demand curve such a firm faces is:

Question

Quizplus · Accepted Answer

In a competitive market with many substitutes, the demand curve a firm faces is perfectly elastic, meaning that a small change in price could lead to the firm losing all its customers to competitors. This is because consumers have many other options and can easily switch if the price of one product increases.

A Firm in a Competitive Market Sells a Product That