A perfectly competitive firm Select one: a. picks the price that leads to the largest market share. b. chooses its price to maxi
mize profit. c. takes its price as given by market conditions. d. sets its price to undercut other firms selling similar products.
1 answer:
Answer:
The answer is C. takes its price as given by market conditions.
Explanation:
In perfect competition, there are:
1. large number of buyers and sellers that no buyer or seller can influence the price of commodity.
2. The commodity in the market are identical (homogeneous). So if a seller increases its own price, consumers will switch to the next seller.
3. There are few or no barriers to entry and exit. Entry and exit cost is low.
4. The bargaining power of seller is low while that of buyer is seller.
So what determines the price?
Price in perfect competitive market is determined by the demand and supply in the market. The demand curve faced by a firm here is horizontal meaning, meaning at high price, the firm cannot sell anything.
So price is determined at the point where demand curve and supply curve intersects.
In at the attached file Po is the prevailing market price and Qo is the quantity demanded at price Po.
Sellers or firms in this market are price takers
You might be interested in
Answer:
- Project completion time: 21 weeks
- Critical Path: B - E - G
- ES, EF, LS, LF are shown below
Explanation:
The earliest start is the latest of the earliest finish times of the predecessors. The earliest finish is the sum of earliest start and duration.
The latest finish is the earliest of the latest start times of the successors. The latest start is the difference of latest finish and duration.
The slack is the difference between earliest start (or finish) and latest start (or finish).
Project duration is the earliest start of the "Project Done" task. For purposes of computing slack, this (project duration) is taken to be the latest finish of the immediate predecessors.
The critical path is the sequence of tasks with 0 slack.
