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A perfectly competitive firm has a. A perfectly elastic demand for its products b. A perfectly inelastic demand for its products c. A downward sloping demand for its products d. None of the above

User Ahmkara
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Answer: a. A perfectly elastic demand for its products

Step-by-step explanation:

In a Perfect Competition, the market sets the price at which firms are able to sell their goods and services. As a result, this price that is set is equal to the demand for goods and services thereby making the Demand curve a horizontal line which signifies perfect elasticity. What this shows is that if another firm attempts to sell the same good at a higher price, they will be unable to sell.

With Price being equal to demand it will also be equal to both Marginal and Average revenue for the good because the company receives the same additional revenue for every unit sold.

User NinethSense
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