If a Perfectly Competitive Firm Were to Raise Its Price

question 100

Multiple Choice

If a perfectly competitive firm were to raise its price above the market price,it would

• A)sell slightly less than at the market price.
• B)sell significantly less than at the market price.
• C)sell slightly more than at the market price.
• D)sell nothing.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, highlighting the trade-offs involved.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid by the borrower to the lender for the use of their funds.

Expected Profit Rate

The forecasted return on investment, predicting the percentage of profit relative to costs.

Investment

The allocation of resources or capital to create profit in the future.