The demand curve facing a perfectly competitive firm is

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In a perfectly competitive market, the demand curve facing a firm is infinitely elastic because the firm is a price taker and can only sell at the prevailing market price. If the firm tries to charge a higher price than the market price, it will not be able to sell any units, and if it charges a lower price, it will not be able to make any additional profit as it could sell all its output at the market price. Therefore, the firm faces a horizontal demand curve at the market price.

The Demand Curve Facing a Perfectly Competitive Firm Is