In competitive price-taker markets, if one firm raises its price,
A) others will follow
B) that firm will increase its revenues
C) that firm will lose revenues because other firms will not follow
D) all consumers will be adversely affected
E) the market demand curve will shift

Question

Quizplus · Accepted Answer

In a competitive price-taker market, firms are price takers and cannot influence market prices. If one firm raises its price, consumers will buy from other firms, causing the firm to lose revenue.

In Competitive Price-Taker Markets, If One Firm Raises Its Price