If profit maximizing firms in a perfectly competitive industry are producing 14,000 units per day, but can only sell 12,000 units per day at the current market price of $23, then the market equilibrium price must be greater than $23.

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Quizplus · Accepted Answer

In a perfectly competitive market, if firms are producing more than what they can sell at the current price, it indicates that the price is above the equilibrium. The excess supply would lead to a decrease in price towards the equilibrium, not an increase.

If Profit Maximizing Firms in a Perfectly Competitive Industry Are