Question

9 Firms that exhibit price-taking behavior a wait for other firms to set price, take it as given, and charge a higher price. b have outputs that are too small to infuence market price and thus take it as given. c take pricing behavior in their own hands. d are independently capable of setting price. 10 The short run is a a period of time in which at least one input cannot be varied b when firms are stuck with sunk costs, unlike the long run. c treated the same way as the long run. d a period of time when no inputs can be varied. If a firm is a price taker, then its marginal revenue will always equal a Price. b Total Cost c Zero. d One. 12 If the market price is above a firm's average cost at the quantity produced a the firm operates and makes a profit. b the firm operates and make zero economic profit. c the market price of the firm's inputs will rise. d total profit is maximized

Answer 1

Firms that exhibit price taking behavior have output that are too small to influence market price and thus it at given. In perfect competition there are large number of firms, and individual firm combination is less industry output. it mean firms have output that are too small to influence market price and thus it as given. Answer: option (b) The short run is a period of time in which at least one output is fixed or cannot be varied. Answer: option (a) If a firm is a price taken, then its marginal revenue will always equal to price. because firm to be a price from market and sell each unit of output at the price taken from market Price remain convert at each level of output solid so, additional unit of output solid generates the revenue equal to price. Answer: option (a) Price is above a firm is average cost at Q.