The shape of the demand curve faced by an individual business in a perfectly competitive market is the result of:
A)advertising
B)the sale of a product that is distinct from others
C)mutual interdependence
D)existing entry barriers
E)the business's inability to affect price

Question

Quizplus · Accepted Answer

In a perfectly competitive market, all firms sell a standardized product and have no control over the market price. Therefore, the demand curve faced by an individual business is horizontal or perfectly elastic, reflecting their inability to affect price.

The Shape of the Demand Curve Faced by an Individual