Question

if a firm in a perfectly competitive industry raises its price above market price

Answer 1

If a firm in a perfectly competitive firm raises its price above the market price, all the clients of this firm will shift demand to some other firm such that this firm will have no client left. This will be possible because each firm in a perfect competition sells homogeneous products and have the same after sales services and thus consumers are indifferent between the sellers. Ultimately, this firm will go out of business when it won't be able to meet its average variable cost.

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