If a perfectly competitive firm raises its price, the quantity demanded of its product _______.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers, meaning they have no control over the market price. If a firm tries to raise its price above the market price, consumers will simply buy from other firms selling at the market price, causing the quantity demanded for the firm that raised its price to fall to zero.

If a Perfectly Competitive Firm Raises Its Price, the Quantity