How Are a Wheat Farmer and a Firm Similar in a Perfectly

question 224

Multiple Choice

How are a wheat farmer and a firm similar in a perfectly competitive market?

• A)Both face vertical demand curves.
• B)Both have to lower their prices if a rival firm lowers its price.
• C)Both face horizontal demand curves.
• D)Both will earn an economic profit if their total revenue equals their total cost.

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Definitions:

Reactance

A motivational reaction to offers, persons, rules, or regulations that threaten or eliminate specific behavioral freedoms.

Compliance

The act of conforming to or following rules, regulations, or standards.

Lowball Technique

A persuasion and negotiation strategy where an initially favorable offer is made, only to be changed to less favorable terms after initial agreement.

Hidden Costs

Expenses that are not immediately apparent at the time of purchase but become evident later in the use or maintenance of an item.