A perfectly competitive firm differs from a monopoly in that the perfectly competitive firm's demand curve and marginal revenue curve are downward sloping rather than horizontal.

Question

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In a perfectly competitive market, a firm's demand curve is perfectly elastic (horizontal) because the firm is a price taker, whereas in a monopoly, the demand curve is downward sloping, and the marginal revenue curve also slopes downward but at a faster rate.

A Perfectly Competitive Firm Differs from a Monopoly in That