Asked by Markus Chobotaru on Apr 26, 2024
Verified
The ___________ curve facing a perfectly competitive firm is perfectly elastic.
A) average total cost
B) marginal cost
C) supply
D) demand
Perfectly Elastic
Describes a situation where the quantity demanded or supplied changes by an unlimited amount in response to any change in price.
Competitive Firm
A business that operates in a market with many buyers and sellers, where the company does not have the market power to set prices.
Demand Curve
A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers, typically downward sloping.
- Recognize the role of supply and demand in determining the market price for perfectly competitive firms.
Verified Answer
GC
Gabriel CorzineApr 29, 2024
Final Answer :
D
Explanation :
The demand curve facing a perfectly competitive firm is perfectly elastic because the firm can sell any quantity of its product at the prevailing market price, indicating that the price does not change with changes in the quantity supplied by an individual firm.
Learning Objectives
- Recognize the role of supply and demand in determining the market price for perfectly competitive firms.