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Author Question: The demand curve an individual competitive firm faces is known as its A) excess demand curve. B) ... (Read 95 times)

dejastew

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The demand curve an individual competitive firm faces is known as its
 
  A) excess demand curve.
  B) market demand curve.
  C) residual demand curve.
  D) leftover demand curve.

Question 2

Would it ever make sense for a firm to charge a price at or below the cost of the product?
 
  What will be an ideal response?



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gstein359

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Answer to Question 1

C

Answer to Question 2

This might be an example of penetration pricing in which the firm is trying to gain market share. (Two other reasons not discussed in the text: limit pricing to prevent entry, and predatory pricing to drive out rivals.)




dejastew

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Reply 2 on: Jul 1, 2018
YES! Correct, THANKS for helping me on my review


T4T

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Reply 3 on: Yesterday
Gracias!

 

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