A Purely Competitive Firm Does Not Try to Sell More

question 62

Multiple Choice

A purely competitive firm does not try to sell more of its product by lowering its price below the market price because

• A)its competitors would not permit it.
• B)it can sell all it wants to at the market price.
• C)this would be considered unethical price chiseling.
• D)its demand curve is inelastic, so total revenue will decline.

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Definitions:

Speculators

Individuals or entities that engage in financial transactions primarily to profit from short-term fluctuations in market prices, rather than for long-term investment or use.

Foreign Exchange Markets

Markets where currencies are traded internationally, crucial for global trade, investment, and economic policy.

U.S. Goods

Products and services that are produced in the United States.

Dollar

The official currency of the United States, also used as a standard monetary unit in international transactions.