"Perfectly competitive firms have total control over the price they set for their product." Explain why the previous statement is correct or incorrect
What will be an ideal response?
The statement is incorrect. Perfectly competitive firms are price takers, which means that they have no control over the price of their product. They must "take" the price given to them by the market as a whole, that is, they must take the price determined by the market demand and market supply.
You might also like to view...
The implicit rental rate for capital is
A) an accounting cost. B) part of the firm's normal profit. C) an opportunity cost. D) a cost that is irrelevant to the business.
"A single-price monopolist will always charge a price that is on the elastic range of its demand." Explain why the previous statement is correct or incorrect
What will be an ideal response?
When you see a commercial on TV asking you to "look for the union label," the union is trying to
A) increase worker productivity. B) increase the demand for nonunion goods. C) increase the demand for union goods. D) decrease the demand for nonunion goods.
The theory of population of _____ predicted that the world's population would increase faster than the food supply.
A. Thomas Robert Malthus B. Mancur Olson C. Lester Thurow D. Edward Denison