-Refer to the above figure. The figure represents the market demand and supply curves for widgets. What statement can be made about the demand curve for an individual firm in this market?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, an individual firm is a price taker, meaning it can sell any quantity of goods at the market price. The market price is determined by the intersection of the market demand and supply curves. Therefore, an individual firm's demand curve is horizontal at the market price, which is indicated in the question as $5.

-Refer to the Above Figure