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A perfectly inelastic demand curve will be completely horizontal and means that consumers would any price for a particular good, which is almost impossible. The closer to being horizontal a demand curve is, the more inelastic the demand.
Horizontal
elasticity
yes the demand curve is perfectly inelastic and horizontal
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
A perfectly inelastic demand curve will be completely horizontal and means that consumers would any price for a particular good, which is almost impossible. The closer to being horizontal a demand curve is, the more inelastic the demand.
Horizontal
elasticity
As price (on the horizontal) increases, demand (on the vertical) will decrease.
yes the demand curve is perfectly inelastic and horizontal
No it does not. Only Perfectly Competitive firms have a horizontal Marginal Cost curve, which is also there demand curve.
The MArket Demand Curve
Quantities demanded are listed on the horizontal axis
When the demand curve is horizontal to the x axis, it is said to be elastic and therefore more responsive to changes in price. When the demand curve is vertical, it is more inelastic and consumers will be more apt to purchase a good regardless of the price.
The demand curve is drawn with price on the vertical axis and quantity demanded on the horizontal axis. Mathematically, the slope of a curve is represented by rise over run, or the change in the variable on the vertical axis divided by the change in the variable on the horizontal axis. Therefore, the slope of the demand curve represents change in price divided by change in quantity. Elasticity, on the other hand, aims to quantify the responsiveness of demand and supply to changes in price, income, or other determinants of demand.
If a market is faced with a horizontal demand curve, then the demand in that market by consumers is perfectly elastic. More simply, any minuscule change in price causes a huge change in quantity demanded.
AnswerFor a perfectly competitive firm with no market control, the marginal revenue curve is a horizontal line. Because a perfectly competitive firm is a price taker and faces a horizontal demand curve, its marginal revenue curve is also horizontal and coincides with its average revenue (and demand) curve. Yes - what you must remember is that a firm's demand curve in perfect competition is its average revenue curve. Average revenue = price x quantity / quantity = price. The demand curve shows the quantity demanded at varying prices and this is exactly what the average revenue curve will do.Because there are so many sellers in the market, no one firm has enough market power to influence price (if a firm tried to raise price consumers would move to different suppliers; nobody would buy the good), therefore price is determined by industry supply and demand, and a firm can produce any quantity at this price . This means that the firm faces a horizontal average revenue (demand curve) and if average revenue is constant, this means total revenue is increasing at a constant rate, and therefore marginal revenue is constant as well.