Why Would a Firm in a Perfectly Competitive Market Always

question 98

Essay

Why would a firm in a perfectly competitive market always choose to set its price equal to the current market price? If a firm set its price below the current market price, what effect would this have on the market?

---

Definitions:

Optimal Experience

The pleasure in performing the process of an activity itself, rather than achieving the goal.

Creative Process

The way in which creativity helps you develop ideas and solve problems.

Intuition

The ability to understand something instinctively, without the need for conscious reasoning.

Scholastic Abilities

The academic skills and talents an individual possesses, often used in the context of learning and education.