If firms in a perfectly competitive industry produce an undifferentiated product,it is not possible to increase profits of the individual firms in the industry by increasing market demand for the product because of the large number of available substitutes.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, increasing market demand can lead to higher prices and profits for individual firms, even if the product is undifferentiated, because the market price is determined by supply and demand dynamics.

If Firms in a Perfectly Competitive Industry Produce an Undifferentiated