Firms in a perfectly competitive market are said to be “price takers”—that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?

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23-07-2019
Business

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Firms in a perfectly competitive market are said to be “price takers”—that is, once the market determines an equilibrium price for the product, firms must accept this price. If you sell a product in a perfectly competitive market, but you are not happy with its price, would you raise the price, even by a cent?

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RenatoMattice RenatoMattice · Answer 1 · 2019-07-30T11:44:11+02:00

Answer: If we sell a product in a perfectly competitive market, then we are bound by the same rule with which most firm operate.

∴ Even if we are not happy with its price, we would not raise the price, even by a cent. This is because , in a perfect competitive market there are several sellers selling the same commodity and since they are the "price taker", they will not be able to comprehend a price change in the commodity as it will lead to decrease in their consumer. i.e. Here consumer will prefer other sellers over that firm.