For a Perfectly Competitive Firm,the Price of Its Good Is

question 216

Multiple Choice

For a perfectly competitive firm,the price of its good is equal to the firm's marginal revenue because

• A) information about price changes is hard to come by for small sellers.
• B) price and marginal revenue are the same economic concepts.
• C) individual perfectly competitive firms cannot influence the market price by changing their output.
• D) the firm's total revenue cannot be changed by anything the firms can do.
• E) there are only a small number of firms in the market.

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Definitions:

Determinant

A factor or element that causes change in an outcome or condition, often used in reference to variables that affect economic indicators.

Cross Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good.

Perfectly Inelastic

A situation in demand or supply in which the quantity demanded or supplied does not change regardless of changes in price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price.