Final answer:
The incorrect statement regarding competitive firms is that a competitive firm cannot increase its revenue by selling more output. As a price taker in a competitive market, a firm can sell additional units at the market price to increase its revenue.
Step-by-step explanation:
Which of the following is not correct concerning competitive firms? The incorrect statement is (c) "A competitive firm cannot increase its revenue by selling more output." In a perfectly competitive market, firms are price takers, meaning they must accept the market price determined by the supply and demand of the product. Thus, a competitive firm can indeed sell more units at the market price to increase its total revenue, as long as the additional cost of producing more units does not exceed the revenue gained from those units.
A competitive firm (a) takes price as given, (b) can sell as many units of output as it wants at the market price, and (d) has a small share of the market, which enables it to adjust output without affecting the overall market supply and price. However, these firms can increase revenue by selling more, contrary to what option (c) suggests.Key factors that define a perfectly competitive firm include its inability to control price, the homogeneous nature of its products, the presence of many sellers, and ease of entry and exit from the market. In the long run, perfectly competitive markets achieve an equilibrium where firms earn zero economic profit.