In a perfectly competitive market model, the demand curve of an individual firm is perfectly elastic. This is because firms in a perfectly competitive market are price takers, meaning they have no control over the price of the product they sell. They can sell all they want at the market price, but nothing at a higher price. Therefore, the demand curve is a horizontal line at the market price.

Here's a step-by-step guide on how to draw the model:

1. Draw two axes: The vertical axis represents the price (P) and the horizontal axis represents the quantity (Q).

2. Draw a horizontal line across the graph to represent the market price (Pm). This line is also the demand curve for the individual firm.

3. Draw an upward sloping line from the origin to represent the firm's supply curve (S).

4. The point where the supply curve intersects the demand curve is the quantity that the firm will produce (Qf).

5. The area above the supply curve and below the price line represents the firm's profit.

Remember, this model assumes that all firms in the market are identical, and that there are many buyers and sellers, each of whom has a negligible impact on the market price.

Question

In a perfectly competitive market model, the demand curve of an individual firm is perfectly elastic. This is because firms in a perfectly competitive market are price takers, meaning they have no control over the price of the product they sell. They can sell all they want at the market price, but nothing at a higher price. Therefore, the demand curve is a horizontal line at the market price.

Here's a step-by-step guide on how to draw the model:

1. Draw two axes: The vertical axis represents the price (P) and the horizontal axis represents the quantity (Q).

2. Draw a horizontal line across the graph to represent the market price (Pm). This line is also the demand curve for the individual firm.

3. Draw an upward sloping line from the origin to represent the firm's supply curve (S).

4. The point where the supply curve intersects the demand curve is the quantity that the firm will produce (Qf).

5. The area above the supply curve and below the price line represents the firm's profit.

Remember, this model assumes that all firms in the market are identical, and that there are many buyers and sellers, each of whom has a negligible impact on the market price.

Knowee AI · Accepted Answer

In a perfectly competitive market model, the demand curve of an individual firm is perfectly elastic. This is because firms in a perfectly competitive market are price takers, meaning they have no control over the price of the product they sell. They can sell all they want at the market price, but nothing at a higher price. Therefore, the demand curve is a horizontal line at the market price.

Here's a step-by-step guide on how to draw the model:

1. Draw two axes: The vertical axis represents the price (P) and the horizontal axis represents the quantity (Q).

2. Draw a horizontal line across the graph to represent the market price (Pm). This line is also the demand curve for the individual firm.

3. Draw an upward sloping line from the origin to represent the firm's supply curve (S).

4. The point where the supply curve intersects the demand curve is the quantity that the firm will produce (Qf).

5. The area above the supply curve and below the price line represents the firm's profit.

Remember, this model assumes that all firms in the market are identical, and that there are many buyers and sellers, each of whom has a negligible impact on the market price.

Draw the perfectly competitive market model which reflect the following question and answer the question. In a perfectly competitive market model the demand curve of an individual firm is: Group of answer choicesperfectly inelastic.relatively inelastic.perfectly elastic.relatively elastic.

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