Final answer:
A purely competitive firm's demand schedule is equal to both its marginal revenue and average revenue, which are equivalent to the market price. The firm is a price taker with a perfectly elastic demand curve, and it maximizes profits when marginal revenue equals marginal cost.
Step-by-step explanation:
The demand schedule for a purely competitive firm is represented by the price at which the firm can sell its output. Since a purely competitive firm is a price taker, it means that the firm's marginal revenue and average revenue are equal to the market price. Therefore, the demand schedule of a purely competitive firm is equal to both its marginal revenue and average revenue. As the firm produces more, its total revenue increases at a constant rate equal to the market price. It is important to note that a perfectly competitive firm can sell any amount of product at the market price, facing a perfectly elastic demand curve.
The perfectly competitive firm's profit is maximized when its marginal revenue, which is also the market price, is equal to its marginal cost. Total revenue is calculated by multiplying the market price by the quantity produced, and if this total revenue exceeds total costs, the firm realizes a profit.