Explain the key differences in outcomes between markets consisting of price-setting firms and markets consisting of...

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Explain the key differences in outcomes between markets consisting of price-setting firms and markets consisting of...

Explain the key differences in outcomes between markets consisting of price-setting firms and markets consisting of price-taking firms.

business economics

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Answer 1

Answer #1

Under the price setting firms system, firm has power to decide the level of price and output. Monopolistic competition is characterized by the firms where these firms have some power.

On other hand, under the perfectly competitive market, firms are price takers and these firms do not have power to influence price level in market.

Price is decided through the market forces of demand and supply.

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Answer 2

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Explain the key differences in outcomes between markets consisting of price-setting firms and markets consisting of...

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