If consumers view the output of any firm in a market to be identical to the output of any other firm in the market,the demand curve for the output of any given firm

Question

Quizplus · Accepted Answer

If consumers view the output of any firm in a market to be identical to the output of any other firm in the market, then the products are perfect substitutes and the demand curve for any given firm will be perfectly elastic, or horizontal. This means that the firm can sell any quantity of output at the prevailing market price and still be able to sell all of its output.

If Consumers View the Output of Any Firm in a Market