Why Will a Perfectly Competitive Firm Not Sell Its Product
Why will a perfectly competitive firm not sell its product below the prevailing market price?
A)It faces inelastic demand.
B)It can sell all it wishes at the market price.
C)The sellers in the market have agreed to not sell below a specified price.
D)Its costs would increase dramatically.
E)This would lead to a price war among sellers.
The price elasticity of demand faced by an individual wheat farmer would come closest to which following value?
Which of the following terms would best describe the price elasticity of demand facing a perfectly competitive firm?
The demand curve facing a perfectly competitive firm
A)is the same as the industry or market demand curve.
B)is almost perfectly elastic at the market price.
C)depends on the firmʹs technology.
D)depends on the firmʹs costs of production.
E)depends on the firmʹs output.