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Chapter 4 Unit 3 questions

For Chapter 3 Unit 2 questions Click Nature & Scope of Business Economics
QUESTION
Q8) What is the shape of the demand curve faced by a firm under perfect competition?

Correct

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Solution:
Under perfect competition, a firm faces a horizontal demand curve. Perfect competition is a market structure characterized by a large number of buyers and sellers, homogeneous products, perfect information, and free entry and exit for firms. In such a market, individual firms are price takers, meaning they have no control over the price of the product they sell. The market sets the price, and each individual firm must accept that price
Correct option is (a)