The supply curve of a perfectly competitive firm is _______________________.in the short_runQuestion 4Answera.unitary elasticb.perfectly inelasticc.perfectly elasticd.elastic
Question
The supply curve of a perfectly competitive firm is _______________________.in the short_runQuestion 4Answera.unitary elasticb.perfectly inelasticc.perfectly elasticd.elastic
Solution
The supply curve of a perfectly competitive firm in the short run is typically considered to be perfectly elastic. So, the answer is c. perfectly elastic.
Here's why: In a perfectly competitive market, firms are price takers, meaning they must accept the market price for their product. If the market price changes, these firms adjust their output levels to continue maximizing profit. This ability to freely adjust output in response to price changes is what makes the supply curve perfectly elastic.
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