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Author Question: If a perfectly competitive firm manufacturing chairs decides to produce 100 more chairs, what ... (Read 323 times)

Mr3Hunna

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on: Jun 29, 2018
If a perfectly competitive firm manufacturing chairs decides to produce 100 more chairs, what happens to the market price of a chair?
 
  What will be an ideal response?

Question 2

In the above table, which plan is a flat-rate tax?
 
  A) only plan A
  B) only plan B
  C) only plan C
  D) both plan A and plan C


amandalm

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The price will not change. Any one perfectly competitive firm is such a small part of the market that a change in its output has virtually no effect on the price. This result is why the firm's marginal revenue equals its price: No matter how much (or how little) the firm produces, the marginal revenue from one more unit always equals the price of the product.

Answer to Question 2

A


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Mr3Hunna

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Reply #2 on: Jun 29, 2018
Thank you


amandalm

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Reply #3 on: Jun 29, 2018
No problemo


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