For purely competitive industry, a fundamental requirement of the demand curve faced by individual firms is that it should be?
Answer Details
For a purely competitive industry, the demand curve faced by individual firms is perfectly price elastic. This means that any change in price by the individual firm will result in a total loss of sales, as consumers will simply purchase from another firm offering the same product at a lower price. Therefore, a perfectly price elastic demand curve is a fundamental requirement for firms operating in a purely competitive industry, as it forces firms to accept the prevailing market price and operate efficiently in order to remain profitable.