The demand curve faced by an individual firm in a competitive market,implies that the firm:

Question

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In a competitive market, the individual firm is a price taker, which means it has to accept the market price as given and adjust its production level accordingly. The demand curve faced by the individual firm is perfectly elastic, which means any attempt to raise the price will result in the loss of all its customers to other firms. Therefore, the only rational strategy for the firm is to produce at the level where its marginal cost equals the market price.

The Demand Curve Faced by an Individual Firm in a Competitive