A firm in a perfectly competitive market can increase total revenue by raising the price of its product.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms have no market power and are price takers. This means that they cannot increase their price without losing all their customers to other firms offering a lower price. Therefore, raising the price of its product would actually lead to a decrease in total revenue, as the firm would sell fewer units.

A Firm in a Perfectly Competitive Market Can Increase Total