Asked by
Josephine James
on Nov 27, 2024
Verified
A purely competitive firm does not try to sell more of its product by lowering its price below the market price because
A) its competitors would not permit it.
B) it can sell all it wants to at the market price.
C) this would be considered unethical price chiseling.
D) its demand curve is inelastic, so total revenue will decline.
Purely Competitive Firm
An enterprise that operates in a perfectly competitive market, where it is a price taker due to the homogeneity of products and the presence of many buyers and sellers.
Market Price
The market rate at which an asset or service can currently be acquired or disposed of.
- Recognize the attributes and consequences of assuming the role of a price taker in a completely competitive marketplace.
- Comprehend why individual firms cannot affect the market price in a perfectly competitive environment.
Verified Answer
JD
Learning Objectives
- Recognize the attributes and consequences of assuming the role of a price taker in a completely competitive marketplace.
- Comprehend why individual firms cannot affect the market price in a perfectly competitive environment.