Asked by
akshay thakur
on Dec 11, 2024
Verified
Which of the following best explains why a firm in a competitive price-taker 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 in order to increase sales.
D) There are no good substitutes for the product supplied by a firm that is a price taker.
Competitive Market
A market structure characterized by many buyers and sellers, free entry and exit, and products that are close substitutes, leading to price determination through supply and demand.
Average Total Costs
The total cost of production (fixed and variable costs combined) divided by the quantity of output produced, representing the cost per unit of output.
- Pinpoint the attributes and ramifications of conducting business in a market driven by competitive pricing.
Verified Answer
AS
Learning Objectives
- Pinpoint the attributes and ramifications of conducting business in a market driven by competitive pricing.