Why Would a Profit-Maximising Firm in a Competitive Market Set

question 136

Multiple Choice

Why would a profit-maximising firm in a competitive market set a price higher than the market price?

• A)if this would result in higher profits
• B)if the firm's costs had increased
• C)if this would increase the firm's market share
• D)none of the above

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Definitions:

Accumulated Depletion

The total amount of natural resource extraction that has been charged as an expense to a company's profit and loss account over a period.

Intangible Assets

Non-physical assets owned by a business that have value, such as patents, trademarks, goodwill, and intellectual property.

Research And Development

The investigative activities that a business or government entity undertakes with the aim of discovering new products, services, or processes.

Replacement Value

The cost to replace an asset at its current market price, considering similar functionality and condition, without necessarily replicating the original.