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21 June, 16:16

Suppose the equilibrium price in a perfectly competitive industry is $15 and a firm in the industry charges $21. Which of the following will happen? A. The firm's revenue will increase. B. The firm will not sell any output. C. The firm's profits will increase. D. The firm will sell more output than its competitors.

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  1. 21 June, 16:43
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    B. The firm will not sell any output.

    Explanation:

    A perfectly competitive industry happens when there are many sellers, the products are the same between sellers and it is easy to enter and leave the market. In this type of industry a company has to take the equilibrium price because the are several firms competing and if it tries to charge even a small amount higher than that, people will not buy anything as they will go with the competition.
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