A Purely Competitive Firm Does Not Try to Sell More

question 101

Multiple Choice

A purely competitive firm does not try to sell more of its product by lowering its price below the market price because

• A) its competitors would not permit it.
• B) it can sell all it wants to at the market price.
• C) this would be considered unethical price chiseling.
• D) its demand curve is inelastic, so total revenue will decline.

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Definitions:

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental.

Cash Received

The actual receipt of cash from transactions, including sales, investments, financing, and other business activities.

Discount on Bonds Payable

The discrepancy between what a bond is actually worth and the lower price it is sold for.

Bonds Payable

A long-term debt instrument issued by corporations or governments, indicating the amount owed to bondholders, including the terms of interest payments and the maturity date.