Question
Question
The demand curve faced by firms in a perfectly competitive market is horizontal to reflect the fact that _____.(1 point)
Responses
individual firms offer a differentiated product
individual firms offer a differentiated product
individual firms offer a homogeneous product
individual firms offer a homogeneous product
individual firms are capable of influencing the market price
individual firms are capable of influencing the market price
individual firms are unable to influence the market price
The demand curve faced by firms in a perfectly competitive market is horizontal to reflect the fact that _____.(1 point)
Responses
individual firms offer a differentiated product
individual firms offer a differentiated product
individual firms offer a homogeneous product
individual firms offer a homogeneous product
individual firms are capable of influencing the market price
individual firms are capable of influencing the market price
individual firms are unable to influence the market price
Answers
GPT-4o mini
The correct response is:
individual firms are unable to influence the market price.
In a perfectly competitive market, individual firms take the market price as given because there are many sellers offering a homogeneous product, and consumers have perfect information. This results in a horizontal demand curve for each individual firm, indicating that they can sell as much as they want at the market price but cannot influence that price by changing their output.
individual firms are unable to influence the market price.
In a perfectly competitive market, individual firms take the market price as given because there are many sellers offering a homogeneous product, and consumers have perfect information. This results in a horizontal demand curve for each individual firm, indicating that they can sell as much as they want at the market price but cannot influence that price by changing their output.