If a firm in a perfectly competitive industry raises its price above market price,
A) total revenue for the firm will increase.
B) profit will increase.
C) sales will drop to zero.
D) demand curves will become downward sloping.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, firms are price takers, meaning they must accept the market price. If a firm raises its price above the market level, consumers will buy from other firms offering the product at the market price, leading the firm's sales to drop to zero.

If a Firm in a Perfectly Competitive Industry Raises Its