00:02
All right, we're going to be looking here at the conditions that enable the demand curve to either be flat or horizontal or the degree to which the demand curve can be horizontal.
00:21
The factors that may lead to that.
00:24
Okay, so that's the starting point of question.
00:27
So we are given a scenario of a comparative first.
00:30
Firm and the says the demand curve is relatively horizontal meaning it is geared towards perfect perfectly elastic tilt okay so the price will always be on the vertical axis quantity will always be on the horizontal axis just to be very clear so one of the things that you can also recall has to do with the difference between a firm and the industry, or you can say the firm and the market.
01:16
Okay, so the demand curve for the market will obviously always be down or not sloping.
01:24
And for the supply curve will be about slopping.
01:30
Supply curve so when it comes to a perfectly competitive uh uh industry or market okay so this is market okay the price is determined by the interest interaction of supply and demand as seen in these illustration okay so that will be the equilibrium price so the the same price is what then constitutes the demand curve of the firm.
02:14
Okay, so this becomes the demand curve of the firm.
02:18
So this is going to be important to remember in a perfectly competitive market, in a perfectly competitive market, the firm is a price taker and the demand and supply curves...