In a competitive market,if buyers did not know all the prices charged by the many firms,

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Quizplus · Accepted Answer

If buyers do not know all the prices charged by the many firms, then demand curves can be downward sloping for some or all firms. This is because if buyers only have limited information on prices, they may be willing to pay higher prices for certain goods or services, leading to a downward sloping demand curve for those particular firms. Option A is incorrect because horizontal demand curves assume that all firms in the market sell an identical product at the same price, which is not the case in a competitive market with differentiated products. Option B is incorrect because it implies that all firms in the market sell a differentiated product, which may not be the case. Option D is also incorrect because there is no direct relationship between lack of information about prices and number of firms in the market.

In a Competitive Market,if Buyers Did Not Know All the Prices