1.Explain why a perfectly competitive firm does not expand its sales without limit if its horizontal demand curve indicates that it can sell as much as it desires at the current market price.

2.Price of piano is $1,000. When outputs of piano increase from zero to 8, total cost is 1,000, 1,200, 1,300, 1,500, 2,000, 3,000, 4,200, 5,500, and 8,200. Calculate total revenue, marginal revenue, marginal cost at each output of piano, and find profit--maximizing level of output(Hint:marginal revenue=marginal cost to maximize profit for a perfectly competitive firm).