Comparing the Shape of the Industry and Individual Demand Curve

question 178

Multiple Choice

Comparing the shape of the industry and individual demand curve in perfect competition,

• A)the industry demand curve is horizontal and the individual firm's demand curve is downward sloping.
• B)the industry demand curve is downward sloping and the individual firm's demand curve is horizontal.
• C)both the industry and individual firm's demand curves are downward sloping.
• D)both the industry and individual firm's demand curves are horizontal.

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Definitions:

Unit Sales

The quantity of product units sold by a business during a specific period, often used to gauge performance.

Selling Price

The amount a buyer pays to acquire a product or service, potentially including discounts, allowances, and added taxes.

Fixed Expense

Costs that do not change with the level of production or business activity, such as rent or salaries.

Break-even

The juncture where the total expenses match the total income, leading to a situation where there is no profit or loss.