Suppose tha market for apples is reprasented by the markst supply and market dem

Question

Suppose tha market for apples is reprasented by the markst supply and market demand curvas depicted in the graph. Assume this markst is perfactly competitive What does an individual apple farmers demand curve look like? The finm's demand curve is Supply A. horizontal at the equilbrium market price. O B. verical at the equllorlum market quantity O C. the same as the market demand curve. O D. the same as the market supply curve. The market quilibrium price is $perbax Enter your rosponse rounded to hwo decimal places) 0 50 0.5 2.5 Quantity (baxes of apples in millians 4.5

Explanation / Answer

The demand curve of perfectly competitive individual firm is horizontal at the equilibrium price because individual firm is price taker, so it can sell as much quantity as much quantity demanded at market price.

Hence option A is the correct answer.

As it can be seen in the diagram that market equilibrium price is $3 per box and it is determined by the intersection of market demand and market supply curve.

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