[amp_mcq option1=”Under perfect competition, demand curve is perfectly elastic” option2=”Under monopoly, demand curve is relatively more elastic” option3=”Both A and B” option4=”All of the above” correct=”option3″]<\/p>\n
The correct answer is: C. Both A and B<\/strong><\/p>\n A perfectly competitive market is a market structure in which there are many buyers and sellers of a homogeneous product, and no one buyer or seller has a significant amount of market power. In a perfectly competitive market, the demand curve for each firm is perfectly elastic, meaning that the firm can sell as much or as little of its product as it wants at the market price.<\/p>\n A monopoly is a market structure in which there is only one seller of a good or service. In a monopoly market, the demand curve for the monopolist’s product is downward-sloping, meaning that the monopolist can charge a higher price and still sell some of its product.<\/p>\n The demand curve for a firm in a perfectly competitive market is perfectly elastic because the firm is a price taker. A price taker is a firm that cannot affect the market price of its product. The market price is determined by the interaction of supply and demand in the market, and the firm must accept this price.<\/p>\n The demand curve for a monopolist is downward-sloping because the monopolist is a price maker. A price maker is a firm that can affect the market price of its product. The monopolist can choose a price that maximizes its profits, and the quantity demanded at that price will be determined by the demand curve.<\/p>\n Therefore, both A and B are not correct.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Under perfect competition, demand curve is perfectly elastic” option2=”Under monopoly, demand curve is relatively more elastic” option3=”Both A and B” option4=”All of the above” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-48243","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n