In a perfectly competitive market, the firm is a price taker because _____.
A.
the price is dictated by the largest firm in the market, and if a given firm lowers its price other firms will conspire against it
B.
the firms in perfect competition are interdependent and if one firm charges a lower price, other firms will also lower their prices and all firms will incur an economic loss
C.
the price in the market is the price that maximizes each firm's producer surplus
D.
each firm makes a slightly different product
E.
it produces only a tiny proportion of the total output of a particular good and buyers are well informed about the prices of other firms
the price is dictated by the largest firm in the market, and if a given firm lowers its price other firms will conspire against it
B.
the firms in perfect competition are interdependent and if one firm charges a lower price, other firms will also lower their prices and all firms will incur an economic loss
C.
the price in the market is the price that maximizes each firm's producer surplus
D.
each firm makes a slightly different product
E.
it produces only a tiny proportion of the total output of a particular good and buyers are well informed about the prices of other firms
Related textbook solutions
Related questions
1. Which of the following economists was not important in the development of game theory?
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A. Antoine Cournot |
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B. John von Neumann |
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C. John Forbes Nash |
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D. Alan Greenspan
2. If the price discounting by two firms in the same market was a sequential process where each firm has perfect knowledge and knows what each payoff is:
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