Why is the demand curve for each seller's product in perfect competition horizontal at the market price?
A)Because each seller is too small to affect market price.
B)Because the price is set by the government.
C)Because all the sellers get together and set the price.
D)Because all the demanders get together and set the price.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, each seller is a price taker, meaning they have no market power to influence the price. Therefore, the demand curve for each seller's product is horizontal at the market price because they cannot charge a higher price without losing customers to other sellers who are offering the same product at the market price.

Why Is the Demand Curve for Each Seller's Product in Perfect