If a single firm in a price-taker market lowers its price below the market equilibrium price,
A) it will get a larger share of the market.
B) it will lose revenue without increasing the quantity it can sell.
C) other firms will lower their prices.
D) other firms will be driven out of the industry.

Question

Quizplus · Accepted Answer

In a price-taker market, firms are price takers and cannot influence the market price. Lowering the price below the equilibrium will not increase sales because the firm can already sell as much as it wants at the market price, leading to a loss in revenue.

If a Single Firm in a Price-Taker Market Lowers Its