A firm in a perfectly competitive market
A) can raise the price to sell more but by selling more will end up earning less economic profit than it had earned before the price increase
B) can cut the price to sell more but by selling more will end up earning less economic profit than it had earned before the price cut
C) can increase its supply to lower the price and thereby raise its economic profit
D) can decrease its supply to raise the price and thereby raise its economic profit
E) is a price taker, that is, accepts the market price for its good as given

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers, meaning they cannot set the price for their goods or services but must accept the market price determined by the supply and demand within the market.

A Firm in a Perfectly Competitive Market