If a firm in a perfectly competitive industry charges a higher price than that charged by other firms in the industry it will be unable to sell any of its output.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, all firms sell identical products, and there are many buyers and sellers, with no single entity able to influence the market price. If a firm tries to charge more than the going market price, consumers will simply buy from other firms offering the product at the lower, market price, leaving the firm that increased its price with no sales.

If a Firm in a Perfectly Competitive Industry Charges a Higher