The market demand curve for a perfectly competitive industry is the horizontal summation of each individual firm's demand curve.

Question

Quizplus · Accepted Answer

The market demand curve for a perfectly competitive industry is the horizontal summation of each individual consumer's demand curve, not the individual firm's demand curve. Each firm in a perfectly competitive market is a price taker and faces a perfectly elastic (horizontal) demand curve at the market price.

The Market Demand Curve for a Perfectly Competitive Industry Is