The perfect competitor has a perfectly elastic demand curve

A) only in the short run.
B) only in the long run.
C) in both the short run and the long run.
D) in neither the short run nor the long run.

Question

The perfect competitor has a perfectly elastic demand curveA) only in the short run.B) only in the long run.C) in both the short run and the long run.D) in neither the short run nor the long run.

Debra Hence · Accepted Answer

Final Answer : C, Explanation :  In both the short run and the long run, a perfectly competitive firm faces a perfectly elastic demand curve. This is because there are numerous firms selling identical products, and consumers can easily switch to another firm if one raises its price even slightly. As a result, each firm can only sell as much as the market will allow at the prevailing market price.

The perfect competitor has a perfectly elastic demand curve

A) only in the short run.
B) only in the long run.
C) in both the short run and the long run.
D) in neither the short run nor the long run.

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Learning Objectives

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