If a perfectly competitive firm doubles its output,
A) price will fall, obeying the law of demand
B) it will have no effect on price
C) the market supply curve shifts to the left
D) its profit will double
E) it prevents other firms from entering the market

Question

Quizplus · Accepted Answer

In a perfectly competitive market, individual firms are price takers, meaning changes in their individual output have no effect on the market price. Doubling output by a single firm is too small to affect the overall market price due to the large number of firms in perfect competition.

If a Perfectly Competitive Firm Doubles Its Output