A producer's price level decision is made by the market in:
A) a monopoly.
B) pure competition.
C) monopolistic competition.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

In pure competition, the producer is a price taker and the market determines the price level. In a monopoly, the producer has market power and can set the price level. In monopolistic competition, the producer has some degree of market power but faces competition from other producers, which affects the price level. Therefore, the most accurate choice is B, where the market determines the price level in pure competition.

A Producer's Price Level Decision Is Made by the Market