The demand curve in a purely competitive industry is , while the demand curve to a single firm in that industry is .
A) perfectly inelastic; perfectly elastic
B) downsloping; perfectly elastic
C) downsloping; perfectly inelastic
D) perfectly elastic; downsloping

Question

Quizplus · Accepted Answer

In a purely competitive industry, the market demand curve is downsloping due to the law of demand. However, the demand curve faced by a single firm is perfectly elastic because the firm is a price taker and can sell any quantity at the market price.

The Demand Curve in a Purely Competitive Industry Is