Asked by Danela Maceda on May 23, 2024
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The demand curve for a purely competitive industry is perfectly elastic, but the demand curves faced by individual firms in such an industry are downsloping.
Perfectly Elastic
Perfectly Elastic describes a situation in which the quantity demanded or supplied responds infinitely or extremely sensitively to a change in price.
Demand Curve
A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at each price level.
Purely Competitive Industry
An industry with many sellers offering identical products, where no single seller can influence market price, leading to perfect competition.
- Gain insight into the qualities inherent to a purely competitive market.
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Learning Objectives
- Gain insight into the qualities inherent to a purely competitive market.
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