True or False? The Individual-Firm Demand curve facing a perfect competitor is a normal downward sloping demand curve.

Question

True or False?

The Individual-Firm Demand curve facing a perfect competitor is a normal downward sloping demand curve

a. True

b. False

Answer 1

In a competitive market there are many firms selling the identical product all individual firms are "price takers". as such, the individual demand curves facing each firm is horizontal (slope = 0)