A firm under a perfectly competitive market wants to increase its sales in the short run. The firm would ______.

lower the price of commodity

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improve the quality of commodity

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offer double the quantity for sale at ruling price

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advertise the product aggressively

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Solution

The correct option is A lower the price of commodity
The demand curve under perfect competition is a horizontal line parallel to x-axis which means that the price of the commodity remains the same and any amount of quantity can be sold at the prevailing price in the market but a little variation in the price will lead to a fall in demand to zero. Therefore, if a firm wants to increase its sales in the short run then they have to decrease the price of its commodity.

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