A Perfectly Competitive Firm Can

question 272

Multiple Choice

A perfectly competitive firm can

• A) sell all of its output at the prevailing market price.
• B) set a higher price to customers who are willing to pay more.
• C) raise its price in order to increase its total revenue.
• D) sell additional output only by lowering its price.
• E) usually not sell all the output it produces, but still "over-produces" because there are some periods when it can sell the extra output at very profitable prices.

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Definitions:

10% More

Indicates an increase or addition of ten percent to a given number or value.

7% Less

A reduction by seven percent from a previous amount or value.

Standard & Poor's 500

An American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ.

Stock Index

A statistical measure that shows changes in the stock market by tracking selected stocks' prices.