Answered

Find expert advice and community support for all your questions on IDNLearn.com. Whether your question is simple or complex, our community is here to provide detailed and trustworthy answers quickly and effectively.

Which of the following best summarizes why a firm in a perfectly competitive market will not increase its product price?

A. Asking a price lower than the market price would be futile because consumers could substitute with other perfectly identical products.
B. Asking a price equal to the market price would be futile because consumers could substitute with other perfectly identical products.
C. Asking a price higher than the market price would be futile because consumers could substitute with other perfectly identical products.
D. Asking a price higher than the market price would be advantageous because consumers could substitute with other perfectly identical products.

Sagot :

GinnyAnsweridn

Final answer:

Perfectly competitive firms cannot set prices, must accept the market price, and engage in price-taking behavior.


Explanation:

Perfectly competitive firms operate in a market where they cannot set prices but must accept the market price determined by demand and supply. Due to the identical nature of products and complete consumer information, firms cannot charge above or below the market price without losing business to competitors. This results in price-taking behavior and prevents firms from increasing prices to seek higher profits.


Learn more about Perfect competition in business markets here:

https://brainly.com/question/34491996


Thank you for using this platform to share and learn. Keep asking and answering. We appreciate every contribution you make. IDNLearn.com is committed to providing accurate answers. Thanks for stopping by, and see you next time for more solutions.