Asked by Jasmine Mendoza on May 16, 2024
Verified
In a perfectly competitive industry,the market demand curve is usually:
A) perfectly inelastic.
B) perfectly elastic.
C) downward-sloping.
D) relatively elastic.
Perfectly Elastic
A situation where the demand or supply responds infinitely to changes in price, resulting in a horizontal demand or supply curve.
Perfectly Inelastic
A market condition where the quantity demanded or supplied does not change in response to price changes; the demand or supply curve is perfectly vertical.
Relatively Elastic
Describes a situation where a small change in price leads to a significant change in quantity demanded or supplied.
- Understand the concept of market structures and the characteristics of perfect competition.
Verified Answer
CH
Courtney HayesMay 20, 2024
Final Answer :
C
Explanation :
In a perfectly competitive industry, while individual firms face a perfectly elastic demand curve due to the presence of many sellers offering identical products, the market demand curve for the entire industry is downward-sloping. This reflects the overall market behavior, where the quantity demanded increases as the price decreases, and vice versa.
Learning Objectives
- Understand the concept of market structures and the characteristics of perfect competition.