If a Price-Taking Firm Selling in a Competitive Market Raises

question 22

Multiple Choice

If a price-taking firm selling in a competitive market raises the price of its product above the market-clearing price, it will:

• A)increase its profits.
• B)maintain its profit base since the demand for the product is inelastic.
• C)be able to increase its sales.
• D)not be able to sell any of its output.
• E)eliminate other firms from the market.