In a perfectly competitive market, sellers who set their price above the market price will sell nothing.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, there are many buyers and sellers, homogenous products, and perfect information. This means that the market price is determined by the forces of supply and demand, and sellers who set their price above the market price will not be able to sell anything as buyers will choose to buy from sellers who offer the same product at a lower price. Therefore, in a perfectly competitive market, it is not possible for sellers to charge a price above the market price and still make any sales.

In a Perfectly Competitive Market, Sellers Who Set Their Price