The market demand curve in a perfectly competitive industry is horizontal,while the demand curve faced by an individual perfectly competitive firm is downward sloping.

Question

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The market demand curve in a perfectly competitive industry is downward sloping, while the demand curve faced by an individual perfectly competitive firm is horizontal or "perfectly elastic." This is because a firm in a perfectly competitive industry is a price taker and can sell as much as it wants at the market price, without affecting the market price.

The Market Demand Curve in a Perfectly Competitive Industry Is