Question

If a perfectly competitive firm raises its price, the quantity demanded of its product ____________. a. diminishes temporarily in the short run b. falls to zero c. stays the same d. falls below marginal cost

Answer 1

Answer:

B. Fall to Zero

Explanation:

In a perfectly competitive market, product cost are all relatively the same. If a firm decides to raise its price on a product it's demanded quantity becomes relatively nonexistent due to the other competitors whos prices have either remained the same or even dropped in price.