A firm that can unilaterally raise its price and still sell its product cannot be in a perfectly competitive industry.

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, firms are price takers, meaning they cannot influence the market price by altering their output or prices. If a firm can raise its price without losing all its customers, it indicates some level of market power, inconsistent with perfect competition.

A Firm That Can Unilaterally Raise Its Price and Still