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Why would a firm in a perfectly competitive market always choose to set its price equal to the current market price?
Wiki User
∙ 13y ago
Because if it set its price higher than the current market price, it would not sell anything; and if it set its price lower than the current price, it would sell all of its product, but it would not make an economic profit.
Understand, however, that this does not happen in real life, because in real life, there is no such thing as a perfectly competitive market.
Wiki User
∙ 13y ago
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Why must perfectly competitive market always deal in commodities?
Because the buyer will not pay extra for one particular company's good. The buyer will always choose the supplier with the lower price.
Explain the process that drives the economic profit to zero in the long run for a perfectly competitive firm?
In perfectly competitive markets, economic profits are zero in the long run because firms are able to enter and exit the market. If firms in a perfectly competitive market are profitable, there would be an incentive for new firms to enter. Supply would increase, causing an increase in quantity and the price to be driven back down to equilibrium: NO PROFIT! If firms in a perfectly competitive market are suffering a loss, some firms would choose to exit the market. Supply would decrease, causing a decrease in quantity and the price to be driven back up to equilibrium: NO PROFIT!
What is the advantage of a consumers to choose from an adequate variety of goods and services?
a. It ensures a competitive market and allows for individual differences among consumers.
Orcording to law if you have high supply with low demend you get lower prices?
When supply is greater than demand, consumers are at liberty to choose from their many options. This leads to sellers lowering their prices to remain competitive, and entice customers to choose them.
Where will I get the most competitive rates of foreign currency exchanged?
The best currency exchange happens at the banks in Indonesia. They have the lowest rates as well as many currencies to choose from.
Why must perfectly competitive market always deal in commodities?
Because the buyer will not pay extra for one particular company's good. The buyer will always choose the supplier with the lower price.
Explain the process that drives the economic profit to zero in the long run for a perfectly competitive firm?
In perfectly competitive markets, economic profits are zero in the long run because firms are able to enter and exit the market. If firms in a perfectly competitive market are profitable, there would be an incentive for new firms to enter. Supply would increase, causing an increase in quantity and the price to be driven back down to equilibrium: NO PROFIT! If firms in a perfectly competitive market are suffering a loss, some firms would choose to exit the market. Supply would decrease, causing a decrease in quantity and the price to be driven back up to equilibrium: NO PROFIT!
Who can help me choose competitive copy bass guitar?
A bass guitarist in a local band can help you choose.
What is a sentence for the word non-competitive?
non-competitive branches are not so good. If you want more money choose something Non-competitive.
Can I compare competitive electricity charges to choose a provider?
that would be winmeel
Where can I find coupons for Godaddy.com?
There are many sites to choose from. My favorites are Fatwallet.com, Retailmenot.com, and Bradsdeals.com. These sites always offer all of the current promo codes you will need.
Choose the correct sentence what. a.he always does it b.he always do it?
a - he always does it
How business enterprises use mis to enhance competitive intelligence and competitive advantages?
The management information system they choose will help them monitor the environment, which will help them develop a competitive environment. The way the system handles information will help them create business intelligence.
What after BSC in life science should one choose to do other then MBA?
You can do MSC or can appear for Competitive Exams.
Why should you vote in elections?
in order to choose a right politician that will lead perfectly our entire nation .
Should competitive exams be abolished?
No competitive exams should not be abolished.there are so many reasons. ->it the only reliable instrument ->By this way we choose the right eligilible candidate ->one can only work hard to pass these examinations. suppose we abolish competitive examinations then there is no way to choose the knowledgeable candidate The element of competition is omni(everywhere) In this way of competition many persons are reaching high position.If we abolish competitive examinations then the environment would be hopeless CAN EVER MONKEY AND DONKEY ARE EQUAL? So i strongly recomment competitive examinations -by ria
What is the advantage of a consumers to choose from an adequate variety of goods and services?
a. It ensures a competitive market and allows for individual differences among consumers.
