In a perfectly competitive market
1.a firm faces a perfectly elastic demand because there is unrestricted entry and exit.
2.if a firm raises its price, it will lose some, but not all, of its customers.
3.when a firm sells another unit of output, the addition to total revenue is equal to market price.
4.all of the above
In a perfectly competitive market
1.a firm faces a perfectly elastic demand because there is unrestricted entry and exit.
2.if a firm raises its price, it will lose some, but not all, of its customers.
3.when a firm sells another unit of output, the addition to total revenue is equal to market price.
4.all of the above
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____ 36. A firm facing a horizontal demand curve
a. |
cannot affect the price it receives for its output. |
b. |
always produces at an output at which P = MR. |
c. |
faces perfectly elastic demand for its product. |
d. |
All of the above are correct. |
____ 37. Which of the following decisions cannot be made by a firm in a perfectly competitive market?
a. |
Market exit decision |
b. |
The market price of the product |
c. |
Quantity of output it can produce |
d. |
Entering a market |
____ 38. In short-run equilibrium, a perfectly competitive firm
a. |
may earn a profit or a loss. |
b. |
always earns a profit. |
c. |
never earns a profit. |
d. |
earns a profit only if the firm has no fixed cost. |