The demand curve facing a perfectly competitive firm is
A) the market demand
B) vertical
C) horizontal
D) unit elastic
E) more inelastic than for a firm in monopolistic competition

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the demand curve facing a single firm is horizontal, meaning that the firm can sell as much output as it wants at the market price. This is because the firm is a price taker and cannot influence the market price through its own actions. Therefore, the correct option is (C) horizontal.

The Demand Curve Facing a Perfectly Competitive Firm Is