Question

For a competitive market, a: .a seller can always increase her profit by raising the price of her product.b.if a seller charges more than the going price, buyers will go elsewhere to make their purchases.c.a seller often charges less than the going price to increase sales and profit.d.a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.

Answer 1

Answer: b.if a seller charges more than the going price, buyers will go elsewhere to make their purchases

Explanation:

A competitive market is characterised by :

1. Firms in the market been price takers.

2. No barriers to entry or exit.

3. Perfect homogenous products.

Because goods in a competition market are homogenous, if a firm increases it's price, customers would go and buy the product from the firm that sells at the market price.

Also firms in a competitive market are price takers, so they cannot set the market price.