Question

Because it allows a firm to sell to different customers at the price they're willing to pay, it eliminates inefficiency

a. true
b. false

Answer 1

A perfectly competitive firm cannot increase its profits by selling an extremely high quantity because it must accept the market price determined by demand and supply.

Step-by-step explanation:

A perfectly competitive firm cannot increase its profits by selling an extremely high quantity because it must accept the price determined by the market demand and supply. In a perfectly competitive market, the firm faces a perfectly elastic demand curve, meaning buyers are willing to buy any number of units at the market price. Therefore, the firm cannot charge a higher price for a higher quantity, as all units will be sold at the same price.