For a perfectly competitive firm,the demand curve:
A)coincides with the marginal revenue curve.
B)is parallel to the vertical axis.
C)is upward sloping.
D)is convex to the origin.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, each firm faces a perfectly elastic demand curve at the market price, meaning the demand curve is horizontal. This implies that the price remains constant regardless of the quantity sold, making the marginal revenue (the additional revenue from selling one more unit) equal to the price for each unit sold. Therefore, the demand curve coincides with the marginal revenue curve for a perfectly competitive firm.

For a Perfectly Competitive Firm,the Demand Curve