]The demand curve faced by a perfectly competitive firm

Question

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In a perfectly competitive market, each firm is a price taker and has no market power to influence the market price. Therefore, the demand curve faced by a perfectly competitive firm is perfectly elastic, meaning that the firm can sell any amount of output at the market price, but cannot charge a higher price without losing all its customers. As a result, the demand curve is a horizontal line at the market price.

]The Demand Curve Faced by a Perfectly Competitive Firm