In perfect competition

A. the market demand curve and the individual's demand curve are identical.

B. the market demand curve is perfectly inelastic while demand for an individual seller's product is perfectly elastic.

C. the market demand curve is downward sloping while demand for an individual seller's product is perfectly elastic.

D. the market demand curve is perfectly elastic while demand for an individual seller's product is perfectly inelastic.

Question

Business

Mallory Hensley

2 June, 09:56

In perfect competition

A. the market demand curve and the individual's demand curve are identical.

B. the market demand curve is perfectly inelastic while demand for an individual seller's product is perfectly elastic.

C. the market demand curve is downward sloping while demand for an individual seller's product is perfectly elastic.

D. the market demand curve is perfectly elastic while demand for an individual seller's product is perfectly inelastic.

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Answers (1)

Know the Answer?

Philip · Answer 1

The correct answer here is C).

Explanation:

The perfect competition is a form of market where there are large numbers of buyers and sellers, and all the sellers are selling same type of products without much of differentiation. Here the demand curve of the market will be downward sloping because when the price of a product increase than the demand for that product will decrease. Here the prices are set by the market forces of demand and supply, individual firms are just price takers and that's why their demand curve is horizontal to the equilibrium price of market.