Daisy is a milk farmer in a perfectly competitive market where there are many milk farmers. The market price of milk is $0.15 per gallon, which is also the marginal cost per gallon of milk. If Daisy charges $0.25 per gallon, she will

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Since the market price and marginal cost per gallon of milk is $0.15, charging a higher price of $0.25 per gallon will make Daisy uncompetitive in the market. Consumers will simply buy from other milk farmers who are selling at a lower price. Therefore, Daisy will not sell any milk if she charges $0.25 per gallon.

Daisy Is a Milk Farmer in a Perfectly Competitive Market