Asked by Yesenia Lazarte on Jun 19, 2024
Verified
In a perfectly competitive industry, the demand curve for the total output of the industry may be downward sloping.
Perfectly Competitive Industry
An industry structure where many firms produce identical products, entry and exit are easy, and no single firm can influence the market price.
Demand Curve
A graph showing the relationship between the price of a good and the quantity demanded, with a typical downward slope indicating that demand increases as price decreases.
- Understand the implications of market structure on firm behavior, including perfect competition.
Verified Answer
ET
Elijah TuttleJun 20, 2024
Final Answer :
True
Explanation :
In a perfectly competitive industry, while individual firms face a horizontal demand curve due to the price-taking behavior, the total market or industry demand curve can indeed be downward sloping, reflecting the overall market's decreasing willingness to pay as quantity increases.
Learning Objectives
- Understand the implications of market structure on firm behavior, including perfect competition.
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