Looking at the 3 graphs below how would you describe the market of each firm? Three demand curves for different market types. The first is a horizontal demand curve in perfect competition, the second is a steep demand curve in a monopoly, and the third is a downward-sloping demand curve in monopolistic competition. The demand curve that a perfectly competitive firm faces is perfectly elastic, meaning it can sell all the output it wishes at the prevailing market price. The demand curve that a monopoly faces is the market demand. It can sell more output only by decreasing the price it charges. The demand curve that a monopolistically competitive firm faces falls in between. Select the correct answer below: Graph (a) is an inelastic demand curve in perfect competition. The firm can sell a set amount of goods at any price. Graph (b) is in a monopoly market. The monopolist sets output on the perceived market demand curve where it is then a price taker, making it's shape steeper than that of a firm in monopolistic competition. Graph (c), a firm in monopolistic competition has a demand curve that slopes because it has more say in the price it charges