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1. Since a perfectly competitive firm can sell as much as it wishes at the marke

ID: 1214765 • Letter: 1

Question

1. Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
1. Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?
1. Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the firm not simply increase its profits by selling an extremely high quantity?

Explanation / Answer

Because, the firm in perfectly competitive market are price taker not price maker, all the firms in the perfectly competitive market have to except the price what is set by the industry, and also every firm in this market contribute a very negligible level of output so, that is why the firm not simply increase its profit by selling an extremely high quantity.

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