A perfectly competitive firm has a horizontal demand curve because it can sell as much as it wants at the market price.

Question

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In a perfectly competitive market, a firm is a price taker and must accept the market price, which is determined by the intersection of the supply and demand curves. Therefore, the firm's demand curve is perfectly elastic (horizontal) at the market price, and any change in price will result in a complete loss of market share for the firm.

A Perfectly Competitive Firm Has a Horizontal Demand Curve Because