We have already noticed, some time back, that the individual firm's demand curve is different from that of the industry, and is more elastic. This is because substitutes increase elasticity, and the customer of the firm has many good substitutes for that firm's output -- namely, the output of other firms in the industry.
Let's go back through the four characteristics of the P-Competitive industry structure, and see how they influence the elasticity of the individual firm's demand.
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