In a perfectly competitive market, if a firm raises the price of its product from the...

In a perfectly competitive market, if a firm raises the price of its product from the prevailing market price of $179 to $199, it

will likely cause the firm to reach its shutdown point immediately.
will cause the firm to recover some of its opportunity costs.
would likely result in a substantial loss of sales to competitors.
is a sure sign the firm is raising the given price in the market.

Expert Solution

Option c is correct,

If in a perfectly competitive market firm raises the price of the product than its product will become expensive and in perfectly competitive market goods are homogeneous in nature that means goods are same in quality, size. As the product become expensive it will result in substantial loss in its sale as competitors are selling the same product at lower price.

Rahul Sunny answered 2 years ago

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