FIGURE 1 THE MARKET FOR COMPETITIVE PRODUCTS WITH AN EQUILIBRIUM PRICE OF $200
Panel A shows a market for standardized windsurfing sails in equilibrium at a price of $200 and industry output Qe. This price is determined by the market’s many buyers and sellers. Panel B illustrates product demand for an individual seller. The individual firm can sell all it wants to at $200 and has no reason to set its price below that. If it tries to sell at prices higher than $200, it sells nothing. The demand curve for the individual firm is horizontal at $200.