Explain how a purely competitive firm views demand for its product and marginal revenue from each additional u

I'm figuring that by purely competitive firm, you mean a firm in a purely competitive market in which no firm has the ability to differentiate its product to generate extra rents, like a farmer who raises corn. In this market, the firm will view demand as infinite, so will treat it as constant. uming a relatively predictable price, it will look at marginal revenue per unit as a function of variable cost & the marginal increase in cost from fixed or large incremental costs needed to add production capacity. Again, a farmer would look at the added costs of production inputs such as land, implements etc. Something like an oil refinery is a little different in that their markets are regional, so adding refining capacity may reduce total profit given the price elasticity of gasoline, even though they would increase revenue. So, we get annual gas price shocks in the summer since they don't see any benefit from the added capacity-since the market is influenced by their output, so isn't quite perfectly competitive.