In a perfectly competitive industry,the price of good A is $2.If a firm in this inudustry decides to increase its price to $2.50,it will:
A)realize an increase in profits of $.50 per unit.
B)be able to increase the quantity sold.
C)be unable to sell any quantity of good A that is produced.
D)lose some of its customers in the market.
E)experience a decrease in profits of $.50 per unit.

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, as buyers will purchase from other firms offering the lower market price.

In a Perfectly Competitive Industry,the Price of Good a Is