Do you think sellers in a perfectly competitive market can price their goods differently? Explain your answer
What will be an ideal response?
One of the assumptions of perfect competition is that all sellers sell identical goods. This implies that sellers who increase the price of their products will lose market share and go out of business because consumers will shift to other sellers who are offering the same goods. Besides, a seller in a perfectly competitive market can sell any amount of the good at the given market price. Hence, they actually do not have any incentive to deviate (increase or decrease) from the market price. Thus, all sellers in a perfectly competitive market are price takers.
You might also like to view...
Property owned by governments is called:
A. Private property B. Shared property C. Public property D. Common property
Which of the following government actions would be considered expansionary fiscal policy?
A. Balancing the federal budget B. Reducing tariffs on imports C. Passing a personal tax credit for the purchase of a new automobile D. Asking the Federal Reserve to reduce interest rates
Logrolling creates a political market and campaign donations are the medium of exchange
a. True b. False
Private property:
A. discourages cooperation because people don't want to part with what they own. B. discourages innovation, as people are often afraid to risk losing their own property. C. encourages owners to maintain or improve their property so as to preserve or enhance value. D. does everything indicated by the other answers.