A firm that faces a horizontal demand curve for its product
A) will always produce that output where average total cost is at a minimum
B) will always produce that output where average total cost is at a maximum
C) is a price maker rather than a price taker
D) is a price taker rather than a price maker

Question

Quizplus · Accepted Answer

A firm facing a horizontal demand curve is a price taker, meaning it must accept the market price for its product. This scenario typically occurs in perfectly competitive markets where firms have no power to influence the price of their products.

A Firm That Faces a Horizontal Demand Curve for Its