The demand curve facing a perfect competitor is perfectly elastic. This implies the 􏰃firm is a 􏰁􏰀

Question

The demand curve facing a perfect competitor is perfectly elastic. This implies the 􏰃firm is a 􏰁􏰀

a. price maker

b. dying 􏰃rm

c. price taker

d. not-for-pro􏰃t 􏰃rm

Answer 1

The Demand Curve is Horizontal. The competitive firm can not influence price by selling any more or any less.If I am selling hotdags at a Phillies game right next to 50 other vendors and I decide to sell only 50 Hot dogs and head home early it will have no impact on the price the other 50 vendors charge