Which of the Following Statements Is Correct

question 1

Multiple Choice

Which of the following statements is correct?

• A) The demand curve of the perfectly competitive industry is elastic as are the demand curves facing the individual firms.
• B) The market demand curve of perfect competition is inelastic because the individual consumers are buying a homogeneous product.
• C) The market demand curve of the perfectly competitive industry is downward sloping while the demand curve of an individual firm is horizontal with a height equal to the product price.
• D) The market demand curve of the perfectly competitive industry is downward sloping, so the demand curves of the individual firms are also downward sloping.

---

Definitions:

Safety Inventory

Extra stock kept in storage to guard against uncertainty in demand or supply, ensuring product availability.

Seasonal Inventory

Inventory that is purchased or produced in anticipation of season-based demand increases, such as holiday merchandise.

Strategic Fit

The alignment between an organization's strategies, resources, and capabilities with its external environment to achieve long-term objectives.

Responsiveness

The ability of a company or system to quickly and effectively respond to changes, customer demands, or market conditions.