McqMate
Q. |
A horizontal demand curve is - |
A. | relatively elastic |
B. | perfectly inelastic |
C. | perfectly elastic |
D. | of unitary elasticity |
Answer» C. perfectly elastic | |
Explanation: The demand curve facing a perfectly competitive firm is flat or horizontal. This is because all firms in perfect competition are by definition selling an identical (homogeneous) product. A horizontal demand curve is a flat curve with a slope of zero. It is a perfectly elastic demand curve. Because the slope of the curve is zero, it is impossible for the price to change in the market. |
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