Answer to Question #275618 in Economics of Enterprise for Didi

Question

A firm in perfect competition currently sells 100 units at $5 each. What will be the revenue obtained by the firm if it increases its price to $6?

Answer 1

The price is formed under the influence of supply and demand. The firm is guided by the prevailing price level. However, even under these conditions, the firm, taking advantage of the conjuncture, can significantly increase the price, and then, gradually reducing it to the level of normal prices, in a short period of time to increase its income.

Only in the short term will there be $600.