What is the shape of the demand curve faced by a firm under perfect competition?
A
Horizontal
B
Vertical
C
Positively sloped
D
Negatively sloped
Correct Answer: Horizontal
The shape of the demand curve faced by a firm under perfect competition is Horizontal. The demand curve faced by a firm in a perfectly competitive market is infinitely elastic. Graphically, this means that it is a horizontal line at the market price.