A Perfectly Competitive Firm Has to Charge the Same Price

question 273

Multiple Choice

A perfectly competitive firm has to charge the same price as every other firm in the market.Therefore, the firm

• A)faces a perfectly inelastic demand curve.
• B)is not able to make a profit in the short run.
• C)is a price taker.
• D)faces a perfectly elastic supply curve.

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Definitions:

TSX

Toronto Stock Exchange, the primary stock exchange in Canada.

Stock Volatilities

The degree of variation of a trading price series over time, measured by the standard deviation of logarithmic returns.

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, and vice versa.

Systematic Correlation

The degree to which the returns of different investments move together due to changes in the overall market.