Under Perfect Competition, a Firm That Sets Its Price Slightly

question 53

Multiple Choice

Under perfect competition, a firm that sets its price slightly above the market price would

• A) make lower profits than the other firms, but the amount would depend on the elasticity of demand.
• B) make a normal rate of return, but on reduced revenues.
• C) lose all of its customers.
• D) earn higher profits as long as the other firms continued to charge the market price.

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