Final answer:
When a perfectly competitive firm raises its price, its revenue will generally fall.
Step-by-step explanation:
When a perfectly competitive firm raises its price, its revenue will generally fall. In a perfectly competitive market, firms are price takers, meaning they have no control over the market price. If a firm raises its price above the equilibrium price, it will likely lose customers to other firms selling at the equilibrium price. This will lead to a decrease in the firm's quantity sold and hence a decrease in its revenue.
To illustrate this on a demand and supply diagram, we can draw a perfectly elastic demand curve for a perfectly competitive firm, as it accepts the market price. The equilibrium price is where the demand and supply curves intersect. If the firm raises its price above the equilibrium price, its revenue will decrease as the quantity sold decreases.