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nika2105 [10]
3 years ago
7

Directions: The following is a free response question released by the

Social Studies
1 answer:
Pavlova-9 [17]3 years ago
5 0

Answer:

In a perfectly competitive market, J&P Company would be too small to have any influence in the price or output or the market. In other words, J&P Company would have no market power whatsoever.

Explanation:

For this reason, both price and output would be determined by exogenous variables to the company, namely, the forces of supply and demand, which in perfect competition can work without any interference, meaning that they produce the best outcome for society as a whole.

Demand is determined by consumers' willingness to pay, while supply is determined by marginal production costs. The point where supply and demand meet is the equilibrium price, at which supply and demand are equal.

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