In a perfectly competitive market, what is the primary consequence of a firm setting its price above the market equilibrium?

In a perfectly competitive market, if a firm sets its price above the market equilibrium, it will likely lose customers. This is because consumers can easily find other firms that sell the same product at the lower market price. For example, if one bakery sells bread for $3 while all other bakeries sell it for $2, many customers will choose to buy from the cheaper bakeries. As a result, the bakery that sets a higher price may not sell enough bread to cover its costs, leading to losses. In the long run, firms that cannot compete at the market price may have to exit the market altogether, reducing competition.