Question

Assertion (A): A competitive firm demand curve is downward sloping.

Reason (R): A individual firm under perfect competition has no control over price.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true but Reason (R) is false.

• Assertion (A) is false but Reason (R) is true.

Answer 1

Assertion (A) is false but Reason (R) is true.

Explanation:

The assertion is false because an individual competitive firm faces a perfectly elastic (horizontal) demand curve, meaning it can sell any quantity at the prevailing market price rather than facing a downward slope. The reason is true because, under perfect competition, the presence of a large number of sellers trading homogeneous products means that no single firm can affect market price.