Spangles are sold in a perfectly competitive market, and the market price of a spangle is $10. A firm in this market can produce 100 spangles at a cost of $4 each. What does this firm's demand curve look like?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the demand curve for an individual firm is perfectly elastic at the market price, meaning it's a horizontal line at the market price, which is $10 in this case.

Spangles Are Sold in a Perfectly Competitive Market, and the Market