If Glass Inc. produces 80 windowpanes per day at the market price of $60 in a perfectly competitive market, what would happen to price if Glass Inc. increases production to 120 windowpanes, all else equal?

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Quizplus · Accepted Answer

In a perfectly competitive market, individual firms are price takers, meaning they can sell as much as they want at the market price. Therefore, if Glass Inc. increases production, the price would remain the same because the price is determined by the overall market supply and demand, not the output of a single firm.