contestada

If the market elasticity of demand for potatoes is -0.3 in a perfectly competitive market, then the individual farmer's elasticity of demand A. will also be -0.3. B. will range between -0.3 and -1.0. C. will be infinite. D. depends on how large a crop the farmer produces.

Respuesta :

Answer:

The correct answer is option C.

Explanation:

A perfectly competitive firm faces a perfectly elastic demand curve. In a perfectly competitive market, there is a large number of buyers and sellers, such that no single firm is able to affects the price or output level. The demand curve faced by a single firm is a horizontal line.  

The market demand curve, on the other hand, is downward sloping. So whatever be the market elasticity of demand, the elasticity of individual firm will be infinite.

Otras preguntas