[amp_mcq option1=”Vertical” option2=”horizontal” option3=”positively sloped” option4=”negatively sloped” correct=”option1″]<\/p>\n
The correct answer is A. Vertical.<\/p>\n
In perfect competition, there are many firms producing identical products. This means that each firm has a very small share of the market, and its individual actions have no impact on the market price. As a result, the demand curve for a firm in perfect competition is perfectly elastic, or vertical. This means that the firm can sell as much or as little as it wants at the market price.<\/p>\n
Option B is incorrect because a horizontal demand curve would mean that the firm can charge any price it wants and still sell the same amount. This is not possible in perfect competition, because the firm would have to charge a price below the market price in order to sell anything.<\/p>\n
Option C is incorrect because a positively sloped demand curve would mean that the firm can charge a higher price and sell more. This is not possible in perfect competition, because the firm would have to charge a lower price in order to sell more.<\/p>\n
Option D is incorrect because a negatively sloped demand curve would mean that the firm can charge a lower price and sell more. This is not possible in perfect competition, because the firm would have to charge a higher price in order to sell more.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Vertical” option2=”horizontal” option3=”positively sloped” option4=”negatively sloped” correct=”option1″]<\/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-51321","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n