In Figure 9-1 on page 204, we explain the difference between the demand curve for a competitive industry and the demand curve facing an individual firm in that industry. Review that figure and answer the following questions.
a. Explain what would happen if the individual firm tried to charge a higher price for its product.
b. Explain why the individual firm has no incentive to charge a lower price for its product.
c. Explain why the demand curve for an individual firm is horizontal at the current market price.