Which of the following best explains why a firm in a perfectly competitive market must take the price determined in the market?
A. The short-run average total costs of firms that are price takers will be constant.
B. If a price taker increased its price, consumers would buy from other suppliers.
C. Firms in a price-taker market will have to advertise to increase sales.
D. There are no good substitutes for the product supplied by a firm that is a price taker.
Answer: B
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According to the figure shown, Starbucks:
This figure displays the choices being made by two coffee shops: Starbucks and Dunkin Donuts. Both companies are trying to decide whether or not to expand in an area. The area can handle only one of them expanding, and whoever expands will cause the other to lose some business. If they both expand, the market will be saturated, and neither company will do well. The payoffs are the additional profits (or losses) they will earn.
A. has a dominant strategy to expand.
B. has a dominant strategy not to expand.
C. has first-mover advantage.
D. should wait to see what Dunkin Donuts is going to do.
An author who writes newspaper columns for $75 each is deciding whether to purchase a personal computer with a laser printer. She figures she'd be able to write two more columns per month than she could on her typewriter. She should
a. buy the computer if the monthly payment is less than $300 b. buy the computer regardless of its price c. not buy the computer if the monthly payment is greater than $75 d. not buy the computer regardless of the price e. buy the computer if the monthly payment is less than $150
What all is included in the calculation of government purchases?
a. clearing snowy roads b. buying public library books c. clearing court dockets d. all of the above are used in the calculation of government purchases
Programs that require people to pay into a common pool and are in turn eligible to draw on benefits under certain circumstances are called:
A. equitable payment programs. B. social insurance programs. C. common insurance programs. D. social benefit programs.