True or false: If individual firms do not face a flat demand curve, there is no...

True or false: If individual firms do not face a flat demand curve, there is no individual or industry supply curve. Briefly explain your answer.

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Expert Solution

Answer - True

The flat demand curve is in perfect competition. If the firms do not have flat demand curve , this means that demand is not perfectly elastic. In this scenario , the firms enjoy market power. So they will not have their own supply curve , instead they will look upon the demand curve , decide the price themselves and then produce as per elasticity of demand. Hence Given statement is correct.

Rahul Sunny answered 2 years ago

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