Because a competitive firm is a price taker, it faces a demand curve that is:
A) perfectly inelastic.
B) relatively inelastic.
C) relatively elastic.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

A competitive firm is a price taker, meaning it cannot influence the market price and must accept it. Therefore, it faces a perfectly elastic demand curve, as it can sell any quantity at the market price but none above it.

Because a Competitive Firm Is a Price Taker, It Faces