The Demand Curve Faced by a Purely Competitive Firm

question 311

Multiple Choice

The demand curve faced by a purely competitive firm

• A)has unitary elasticity.
• B)yields constant total revenues even when price changes.
• C)is identical to the market demand curve.
• D)is the same as its marginal revenue curve.

---

Definitions:

Quantity Q

A specific quantity of goods or services, often used in discussions of supply and demand or economic models.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus the amount they actually receive in the market.

Consumer Surplus

Consumer Surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit consumers receive from a transaction.

Producer Surplus

The difference between what producers are willing to sell a product for and the actual price they receive, representing their benefit or surplus.