Which of the following statements is correct?
A. The market demand curve of the perfectly competitive industry is downward sloping while the demand curve of an individual firm is horizontal with a height equal to the product price.
B. The demand curve of the perfectly competitive industry is elastic as are the demand curves facing the individual firms.
C. The market demand curve of perfect competition is inelastic because the individual consumers are buying a homogeneous product.
D. The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.
Answer: A
You might also like to view...
Which of the following is an implicit cost of migration?
A. The cost of traveling to a new country B. Having to adapt to a new culture C. Paying application fees D. Payment to an expediter
The psychological theory of the business cycle is
a. incorporated into practically all other theories of the cycle. b. held in disrepute by most economists. c. a complete explanation of the cycle. d. used only by monetary theorists.
Transfer payments are included in which category under the expenditure approach to GDP accounting?
a. consumption b. government purchases c. net exports d. Transfer payments are not directly included in GDP calculations.
Marginal revenue is
a. the change in total revenue obtained by selling an additional unit of output b. average revenue per unit of output c. the change in total revenue per unit of cost d. total revenue divided by average revenue e. average revenue divided by marginal cost