One implication of the shape of the demand curve facing a perfectly competitive firm is that:
A)if the firm increases its price above the market price, it will earn higher revenue.
B)if the firm decreases its price below the market price, it will earn higher revenue.
C)if the firm increases its price above the market price, it will earn zero revenue.
D)the market would be unable to reach a new equilibrium if demand changed.

Question

Quizplus · Accepted Answer

A perfectly competitive firm cannot raise its price without losing all of its customers to the many rival firms that produce the same product.

One Implication of the Shape of the Demand Curve Facing