In a perfectly competitive market, an increase in the market demand will shift the perfectly competitive firm's______ curve______ .

Question

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In a perfectly competitive market, each firm faces a horizontal demand curve. Therefore, an increase in the market demand will lead to a higher price for the firm's product. This, in turn, will cause the firm's demand curve to shift upward, as it can now sell more at the higher price. The firm's marginal cost curve will remain the same, assuming there are no changes in input prices or technology.

In a Perfectly Competitive Market, an Increase in the Market