Question : The demand curve facing a perfectly competitive firm:

Option 1: downward sloping 

Option 2: perfectly inelastic 

Option 3: a concave curve 

Option 4: perfectly elastic 


Team Careers360 16th Jan, 2024
Answer (1)
Team Careers360 20th Jan, 2024

Correct Answer: perfectly elastic


Solution : The correct option is perfectly elastic .

A completely competitive company faces a perfectly elastic demand curve, meaning its slope is zero. In other words, at the market price, the demand curve is a horizontal line. This is because, in a market with perfect competition, every business is a price taker and is free to offer any number of its goods for sale at the going rate.

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