Which curve represents price in perfect competition market?
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In economics , specifically general equilibrium theory , a prefect market is define by several idealizing conditions ,collectively called prefect competition
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The horizontal demand curve represents price in a perfect competition market.
How this demand plays an important role in a competitive market?
- This curve represents the demand for any product at a particular price
- In this curve, when the demand increases then the price decreases so we can see the demand of any product
- If the price of a product increases the sales get decreased
- Example- If we sell 25 cakes at $10 we make a profit of $ 250 but if the price increases to $15 then the sales get reduced to 20 cakes
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