What is the importance of competition in relation to self-interest in a market system?
Please provide the best answer for the statement.
Competition is important as the force which tempers or regulates the greed or self-interest of the producers, sellers, workers, and buyers. If producers make too much profit, competitors will arise to take advantage of the opportunity and as production increases, prices and profits will fall. If workers demand too much, employers will seek other workers who are willing to work for less. If buyers are not willing to pay a fair price for the product, producers will sell the product to someone who is. In each case it is competition or the threat of competition that tempers the greed of the economic “player.”
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If the supply of labor ________, real wages fall and the amount of labor employed ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Briefly describe the potential negative effects of increasing government purchases rather than decreasing taxes during a recession.
What will be an ideal response?
To maintain their incomes when the selling price of a bushel or bale dropped, most farmers
Excess capacity for a firm in an oligopoly situation
A. cannot contribute to long run profit for a firm. B. is a deterrent to entry in the market by potential competitors. C. will be temporary if the planning was done right. D. encourages competitors to enter the market and build at optimal capacity.