Why Does a Firm in a Competitive Industry Charge the Market

question 382

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 wants to at the market price.
• D)All of the above are correct.

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