Question 7
MediumOriginal questionRead the two statements and choose the correct option.
I. Under perfect competition, the demand curve facing the firm is horizontal.
II. Under perfect competition, the market demand curve is horizontal.
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
I is true: the firm can sell any amount at the market price.
II is false: the market demand curve slopes downward, by the law of demand.
- Concept
- Firm's demand versus market demand
- Typical timeTypical
- 70 s
- Your timeYours
- —
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