Fred Monroe is a fisherman in the perfectly competitive fish industry in northern Minnesota. After years of experience, he knows that the demand curve for the fish he sells is
A) horizontal
B) vertical
C) downward sloping
D) the same as the industry demand
E) upward sloping

Question

Quizplus · Accepted Answer

In a perfectly competitive market, individual firms face a horizontal demand curve because they are price takers. This means that they can sell any quantity of their product at the market price, but they do not have the power to influence the price themselves.

Fred Monroe Is a Fisherman in the Perfectly Competitive Fish