Why Will a Perfectly Competitive Firm Not Sell Its Product

question 108

Multiple Choice

Why will a perfectly competitive firm not sell its product below the prevailing market price?

• A)It faces inelastic demand.
• B)It can sell all it wishes at the market price.
• C)The sellers in the market have agreed to not sell below a specified price.
• D)Its costs would increase dramatically.
• E)This would lead to a price war among sellers.

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Definitions:

Cobalt

Cobalt is a chemical element with the symbol Co and atomic number 27, known for its magnetic properties and use in various alloys.

Chloride

An anion resulting from the dissociation of hydrochloric acid (HCl), or a compound formed by the combination of chlorine with a metal or organic molecule.

Magnesium

A shiny gray solid, this chemical element has symbol Mg and atomic number 12, known for its lightness and strong structural properties, widely used in alloys.