What Is Meant by the Term Fair-Return Price

question 30

Multiple Choice

What is meant by the term fair-return price?

• A)The price which ensures that the firm is able to make normal profits only.
• B)The price which ensures that the firm is able to make economic profits only.
• C)The price which ensures that the output will be produced at the lowest possible cost.
• D)The price which ensures the best allocation of products.
• E)A price equal to marginal cost.

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Definitions:

Perfectly Competitive Market

A market structure where many firms offer an identical product, and no single supplier can influence the market price.

Control Over Price

The ability of a company or entity to dictate the price at which they sell their products or services, often due to lack of competition.

Perfectly Competitive Firms

Companies that operate in a market where no single buyer or seller has market power, and all goods are identical.

Identical Products

Goods that are exactly the same in quality, function, and appearance, often produced in industries with perfect competition.