The price elasticity of demand for a firm's output is generally more elastic than the price elasticity of demand for the industry's output of the commodity.

Question

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This is because consumers can switch to other firms' products within the industry if one firm raises its prices, but they have fewer substitutes if the entire industry raises prices, making demand for a single firm's output more sensitive to price changes.

The Price Elasticity of Demand for a Firm's Output Is