Why Does a Firm in a Competitive Industry Charge the Market

question 302

Multiple Choice

Why does a firm in a competitive industry charge the market price?

• A) If a firm charges less than the market price,it loses potential revenue.
• B) If a firm charges more than the market price,it loses all its customers to other firms.
• C) The firm can sell as many units of output as it want to at the market price.
• D) All of the above are correct.

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Definitions:

Customer-Oriented Metrics

Indicators used to measure aspects of customer satisfaction, behavior, and preferences in relation to a company's products or services.

Customer Satisfaction

A measure of how products or services meet or surpass the expectations of customers, often used as an indicator of repeat business and loyalty.

Global Segments

Refers to the division of the global market into distinct groups of customers or regions with similar characteristics or needs.

Positioning

The process of establishing a distinctive place for a brand or product in the market and in the customers' minds.