Final answer:
The statement that Gandy's Fruit and Vegetable Corner in a perfectly competitive market could increase prices and maintain sales is false, as they are price takers and would lose customers if they set prices above market equilibrium. Independent trucking can be considered a close example of a perfectly competitive market. The assertion that sellers would never sell below the equilibrium price is also false; market conditions can lead to price fluctuations.
Step-by-step explanation:
The assertion that Gandy's Fruit and Vegetable Corner, a company operating in a perfectly competitive market, could raise prices above the market equilibrium and still maintain sales is false. In a perfectly competitive market, all firms are price takers, meaning they must accept the market price. If a firm tries to raise its price, even by a cent, customers will simply buy from competitors, assuming products are homogeneous and there are no barriers to entry or exit. As such, if Gandy's were to raise their prices, they would risk losing all of their customers to competitors offering the same fruits and vegetables at the going market rate.
While independent trucking could potentially fit the characteristics of a perfectly competitive industry—since there are many sellers and buyers, the service is homogeneous, and there are low barriers to entry—most industries do not meet all the criteria of perfect competition in practice.
Turning to the example of agricultural markets, we see that producers, such as corn farmers, cannot sell above or below the equilibrium price as they would either lose customers or earn less than the maximum possible revenue. If the market price for a pack of raspberries rises to $6, firms would experience increased profits so long as their marginal cost remains below the new market price. This is because at any price above their marginal cost, each additional pack sold increases the firm's profit.
Sellers might also sell for less than the equilibrium price in certain situations, such as to clear excess inventory or during a market downturn, making the aforementioned statement false. In reality, prices can fluctuate due to such economic pressures, showing the dynamism of markets rather than strict adherence to a fixed equilibrium price at all times.