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Is it true that a firm with a market power can sell whatever quantity it wishes at whatever price it chooses?
Wiki User
∙ 12y ago
Not necessarily. If a company has "market power", this would mean that they have more market share than other companies in the industry. If this company tried to significantly increase prices, they can very quickly lose their market power to competitors (assuming that the competitors leave their prices relatively the same) coming in and taking away customers with lower prices.
Another rule of thumb is that the more profitable your business is, the more competitive it will become. Others will see that there is money to be made and will join in the market to steal customers away from you.
Just because you are a market leader doesn't mean you can jack up your prices and still continue to be a market leader.
Wiki User
∙ 12y ago
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Why is it impossible for a profit-maximizing monopolist to choose any price and any quantity it wishes?
The monopolist can choose either the price or the quantity, but choosing one determines the other - they come in pairs.
What will happen when the reserve bank wishes to implement a deflationary open-market policy?
There will be changes made to interest rates as well as a deliberate depreciation of the face value of the currency. There will also be more purchases on the open market of government-backed and foreign securities as well as more spending on public goods or services.
What does a person's will list?
Whatever the testator wishes to list. A good will should include the individual's statement that it is a will, a list of the natural beneficiaries, and the disposition of assets. It may include the creation of trusts, and even individual bequests of specific items.
What are the differences between perfect and imperfect competition?
Perfect competition is a theoretical market situation in which there are many buyers and many sellers of virtually identical goods, with every buyer and seller possessing accurate information about availability and prices, and no individual buyer or seller is big enough to influence the market. In perfect competition, there are no barriers to entry - that is, anyone who wishes can easily get into the business of selling the particular goods.
When there is a decrease in demand what happens in the market?
It means the prices will go down. This is a fundamental (and fairly simple) economic concept known as supply and demand. If there is greater demand than there is supply, prices go up. If there is a greater supply than there is demand, prices go down. It should however be noted that supply and demand does notdetermine the price of a commodity, rather, it causes the price to fluctuate around a perceived value.A market is any arrangement that enables buyers and sellers to get information and do business with each other.A competitive market is a market that has many buyers and many sellers so no single buyer or seller can influence the price.The money price of a good is the amount of money needed to buy it.The relative price of a good-the ratio of its money price to the money price of the next best alternative good-is its opportunity cost.If you demand something, then you:§ Want it,§ Can afford it, and§ Have made a definite plan to buy it.Wants are the unlimited desires or wishes people have for goods and services. Demand reflects a decision about which wants to satisfy.The quantity demanded of a good or service is the amount that consumers plan to buy during a particular time period, and at a particular price.What Determines Buying Plans?The amount of any particular good or service that consumers plan to buy is influenced by1. The price of the good,2. The prices of other goods,3. Expected future prices,4. Income,5. Population, and6. Preferences.The Law of DemandThe law of demand states:Other things remaining the same, the higher the price of a good, the smaller is the quantity demanded.The law of demand results froma substitution effectan income effectSubstitution effect-when the relative price (opportunity cost) of a good or service rises, people seek substitutes for it, so the quantity demanded decreases.Income effect-when the price of a good or service rises relative to income, people cannot afford all the things they previously bought, so the quantity demanded decreases.Demand Curve and Demand ScheduleThe term demand refers to the entire relationship between the price of the good and quantity demanded of the good.A demand curve shows the relationship between the quantity demanded of a good and its price when all other influences on consumers' planned purchases remain the same.A Change in DemandWhen any factor that influences buying plans other than the price of the good changes, there is a change in demand for that good. The quantity of the good that people plan to buy changes at each and every price, so there is a new demand curve.When demand increases, the quantity that people plan to buy increases at each and every price so the demand curve shifts rightward.When demand decreases, the quantity that people plan to buy decreases at each and every price so the demand curve shifts leftward.
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The monopolist can choose either the price or the quantity, but choosing one determines the other - they come in pairs.
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Colonel Custer is surrounded by Indians and he finds a Genie who grants him one wish but whatever he wishes for the Indians get two of what does he wish for?
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