A competitive firm demand curve is ?
Correct answer: A. Horizontal
- A. Horizontal
- B. vertical
- C. downward sloping
- D. elastic
Explanation
An individual competitive firm's demand curve is horizontal because it can sell any feasible quantity at the prevailing market price but cannot charge more. This is also described as perfectly elastic demand.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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