Why cant a firm in a perfectly competitive industry charge a

Why can\'t a firm in a perfectly competitive industry charge a price above the market-clearing price?

Select one:

a. Government-imposed price ceilings prevent prices from being raised.

b. Firms in a perfectly competitive industry face significant barriers to entry.

c. Perfectly competitive firms are price searchers.

d. Numerous competitors produce the same product and charge the market price.

Solution

Since a perfectly competitive firm is a price taker and so all firms charge the market price and there are large number of firms in this industry. This is the reason why firm do not charge more than the market Price.

Hence option d is the correct answer.

D,;

Numerous competitors produce the same products and charge market price.