The Demand Curve for Each Seller's Product in Perfect Competition

question 204

Multiple Choice

The demand curve for each seller's product in perfect competition is horizontal at the market price because

• A)each seller is too small to affect the market price.
• B)the price is set by the government.
• C)all the sellers get together and set the price.
• D)all the demanders get together and set the price.

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Definitions:

Securities and Exchange Commission

A U.S. government agency responsible for regulating the securities markets and protecting investors by enforcing securities laws.

Regulatory Capture

A situation in which regulatory agencies are dominated by the industries they are supposed to be regulating, often leading to decision-making that benefits the industry at the expense of the public interest.

Wall Street

A symbol for the financial markets and institutions located in the Financial District of Lower Manhattan, New York City, often associated with the American financial sector and stock market.

Financial Firms

Businesses that provide financial services such as banking, investment, insurance, and asset management.