T-Shirt Enterprises is selling in a purely competitive market. Its output is 300 units, which sell for $1 each. At this level of

Question

1 year ago

9

output, marginal cost is $1 and average variable cost is $1.50. The firm should:

1 answer:

FinnZ [79.3K] · Answer 1 · 2023-12-03T23:01:49+03:00

When the level of output, marginal cost is $1 and average variable cost is $1.50. The firm should "produce no output units".

<h3>What is purely competitive market?</h3>

Perfect competition refers to a fictitious market structure. If there is perfect competition, there are no monopolies.

The following characteristics of this kind of structure are crucial:

All enterprises sell the same product, which is a homogeneous or commodity good.
Every business is a price taker, meaning that they have no control over the market price for their goods.
Market share has no bearing on price adjustments.
The product being supplied and the pricing each business is seeking with in past, present, or future are all completely or perfectly known to buyers.
Resources such as labor and capital are totally movable.
There are no fees for businesses to enter or exit the market.

Each genuine market can be categorized as imperfect since they all occur beyond the level of the ideal competition model.

To know more about the purely competitive market, here

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