In a perfectly competitive market, a typical firm: Tries to undercut its competitors by charging a...
In a perfectly competitive market, a typical firm:
|
Tries to undercut its competitors by charging a price below the market price |
|
|
Can sell any quantity of output it can produce at the market price |
|
|
Can raise its price to maximize its profit |
|
|
Faces a downward sloping demand curve |
Homework Answers
Answer
Option 2
Can sell any quantity of output it can produce at the market price
A perfectly competitive market is a price taker because of identical product and free entry so there are many firms in the market which can not influence price and can sell any quantity at the market price.
the demand curve is horizontal
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