How Does a Firm Compete

question 49

Multiple Choice

How does a firm compete?

• A) Ask customers what business they would choose if they had not chosen your business
• B) Find the products you would like to duplicate
• C) Deliberately choose with whom you want, and can, compete
• D) Both A & C

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Definitions:

Producer Surplus

The variance between what producers are prepared to sell a product or service for and the actual revenue they achieve.

Equilibrium Price

The price in the market where the amount of goods being offered meets the amount of goods consumers want.

Unregulated Market

A market operating without governmental rules or oversight wherein the forces of supply and demand are unimpeded by outside control.

Price Controls

Regulatory measures by which a government seeks to control the price of goods and services, either by setting maximum prices (price ceilings) or minimum prices (price floors).