Questions: In competitive markets, firms that raise their prices are typically rewarded with larger profits.

The answer is False.

Explanation:

1. In competitive markets, there are many firms offering similar or identical products. This means that consumers have many alternatives to choose from.
2. If a firm raises its prices in a competitive market, consumers are likely to switch to a competitor offering a lower price, leading to a loss of sales for the firm that increased its prices.
3. As a result, raising prices in a competitive market typically does not lead to larger profits because the firm loses customers to competitors, which can decrease overall revenue.

In summary, in competitive markets, raising prices usually results in a loss of customers and does not lead to larger profits.