0
Explain the following statement with suitable examples a firm under a perfect competition is a price-taker and not a price-maker?
Wiki User
∙ 15y ago
In perfect competition there are no barriers to entering the market as a firm. This also says that for this particular market that there is on differentiation of products between firms .This implies that fixed cost costs and total costs are zero and the only costs that matter are marginal costs. This makes the entry and exit for a market without costs and therefore any firm can take a share of the market. This makes it so if a particular firm wants to charge higher than the market price no consumer will buy their product because they have a plethora of other sources that charge for a lower price for the same exact product. Therefore it must take the price of the market or else it will sell no goods. There is also no reason for the firm to lower its price either because it can sell as much as it wants in the competitive market at a higher price.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
How do you best describes the relationship between competition and a free-market economy?
The following statement best describes the relationship between competition and a free market system: Competition increases within a free market system.
Which of the following is a correct statement about labor?
it is the work of pushing out the fetus
Which statement describes the role of a government that is following the philosophy of laissez-faire?
The government does not interfere in business practices.
Which statement best describes the role of a government that is following the philosophy of laissez-faire?
The government does not interfere in business practices.
Which of the following is a true statement about international trade?
Countries engage in international trade to satisfy the wants or needs of the people.
How do you best describes the relationship between competition and a free-market economy?
The following statement best describes the relationship between competition and a free market system: Competition increases within a free market system.
Which statement is the negation of the following statement?
The preceding preceding statement was visible.
Which of the following statement is executed after call moduleB?
the first statement in ModuleB
When must divers submit their statement of planned dives to the Olympic referee for the London 2012 diving competition?
24 hours before the competition.
Which ofnthe following statement appernticeships is true?
No following statements were included.
The part of a conditional statement following the word then?
The part of a conditional statement following the word "then" is the consequent. It is the action or outcome that will occur if the condition specified in the statement is met.
Which statement describes the rate of change of the following function?
Which statement describes the rate of change of the following function?f(x) = -6x - 9
In geometry What is the converse of the following statement. If it's a dime then it's a coin.?
Find the converse of the following statement. If it's a dime, then it's a coin.
Which of the following is the name given to the permanent summary of all supporting journals?
statement statement
Which statement represents the following Venn diagram?
A+
What is for statement in c?
It is one of the statements. Its syntax in BNF is the following: statement ::= for_statement for_statement ::= 'for' '(' opt_expression ';' expression ';' expression ')' statement
Is this statement true or falseThis following statement is an example of the Multiplication Property of Inequality?
true
