Scenario 9.2
Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments.
-If a firm in a perfectly competitive market raises its price:

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers, meaning they cannot set prices above the market equilibrium without losing all their customers to competitors. Therefore, if a firm raises its price, consumers will buy from other firms offering the same product at the market price, leading to the firm selling nothing.

Scenario 9.2 Consider a Publicly Held Firm (One Whose Stock Shares Are