Why Does a Firm in a Competitive Industry Charge the Market

question 213

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 market power.
• C)The firm can only sell limited number of units of output, so it wants to sell at the market price in order to lower its costs.
• D)All of the above are correct.

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Definitions:

Technical Specifications

Detailed information and criteria about the technical aspects of a product, explaining its design, features, and performance.

Ethical Standpoint

A perspective or position from which moral decisions are made, often based on a set of moral principles or values.

Vocational Technology

Educational training programs that focus on the skills required for specific trades or careers.

Legally Actionable

A situation, conduct, or event that provides sufficient grounds for a lawsuit.