A perfectly competitive firm is a price taker. Therefore, it faces a
Select one:
O a. perfectly elastic supply curve for its output
O b. perfectly inelastic demand curve for its output
c. perfectly elastic demand curve for its output
O d. perfectly inelastic supply curve for its output
O e. unit-elastic demand curve for its output

Question

10-06-2024
Business

Answered

A perfectly competitive firm is a price taker. Therefore, it faces a
Select one:
O a. perfectly elastic supply curve for its output
O b. perfectly inelastic demand curve for its output
c. perfectly elastic demand curve for its output
O d. perfectly inelastic supply curve for its output
O e. unit-elastic demand curve for its output

Answer :

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Final answer:

In a perfectly competitive market, a firm is a price taker facing a perfectly elastic demand curve for its output, allowing it to sell any quantity at the market price.

Explanation:

A perfectly competitive firm is a price taker, meaning it has perfectly elastic demand for its output. This implies that the firm can sell any quantity of output at the market price without affecting it.

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