![]() It implies that the firm faces a perfectly elastic demand curve for its product: buyers are willing to buy any number of units of output from the firm at the market price. ![]() This is already determined in the profit equation, and so the perfectly competitive firm can sell any number of units at exactly the same price. Since a perfectly competitive firm must accept the price for its output as determined by the product’s market demand and supply, it cannot choose the price it charges. Profit = Total revenue − Total cost = ( Price ) ( Quantity produced ) − ( Average cost ) ( Quantity produced ) Profit = Total revenue − Total cost = ( Price ) ( Quantity produced ) − ( Average cost ) ( Quantity produced )
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