Multiple Choice
Under perfect competition what would happen to a firm that sets its price slightly above market price?
A) The firm would lose all of its customers.
B) The firm could sell as much as it wanted in the market.
C) The firm would earn a lot of profit as long as the other firms charge the market price.
D) It would continue to earn a profit but revenue would be lower.
E) It would earn lower profits than other firms,but the level of reduction would depend on the elasticity of demand.
Correct Answer:
Verified
Correct Answer:
Verified
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