question, why is the elasticity of demand for a perfect competitive firm perfectly elastic but for the same industry it is not. The book says the elasticity for a perfect comp industry is “finite” what does that mean? does it have something to do with the effect of players exiting and that boosting output? i am ready to torch my econ book seriously
Because in perfect competition, if you increase price, you sell nothing. At the same time if everybody increase the price, they still be able to sell their products. But such an increase is imposible.
kochunni69 Wrote: ------------------------------------------------------- > Because in perfect competition, if you increase > price, you sell nothing. At the same time if > everybody increase the price, they still be able > to sell their products. But such an increase is > imposible. ahhhm THANK YOU. in perfect comp, individual firms are PRICE TAKERS thx!!!