« previous next »

Author Question: Perfectly competitive firms have total control over the price they set for their product. Explain ... (Read 64 times)

@Brianna17

  • Hero Member
  • *****
  • Posts: 550
on: Jun 29, 2018
Perfectly competitive firms have total control over the price they set for their product. Explain why the previous statement is correct or incorrect.
 
  What will be an ideal response?

Question 2

Kristen has an income of 450 per year to spend on music CDs and movies on DVDs. Initially the price of a CD is 15 and the price of a DVD is 22.50. The indifference curves in the figure above (I1, I2, and I3 ) reflect Kristen's preferences.
 
  If the price of a DVD falls to 18, Kristen will buy A) 10 DVDs and 15 CDs per year.
  B) 15 DVDs and 12 CDs per year.
  C) 12.5 DVDs and 11 CDs per year.
  D) 13 DVDs and 15 CDs per year.


dyrone

  • Sr. Member
  • ****
  • Posts: 322
Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect. Perfectly competitive firms are price takers, which means that they have no control over the price of their product. They must take the price given to them by the market as a whole, that is, they must take the price determined by the market demand and market supply.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

Side effects from substance abuse include nausea, dehydration, reduced productivitiy, and dependence. Though these effects usually worsen over time, the constant need for the substance often overcomes rational thinking.

Did you know?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

Negative feedback as a mechanism by which homeostatic control systems operate. Negative feedback as a mechanism by which homeostatic control systems operate.
Gate Control Theory, Gate control, Open gate, Closed gate, Pain, Nerve transmission of pain, Pain ma Gate Control Theory, Gate control, Open gate, Closed gate, Pain, Nerve transmission of pain, Pain ma
Experimental demonstration of respiratory control Experimental demonstration of respiratory control
Crime Control in America: What Works?, 4th Edition Crime Control in America: What Works?, 4th Edition
Finding the length given total distance and distance longer than other point Finding the length given total distance and distance longer than other point
Find derivative using product rule Find derivative using product rule
Video: Membrane transport proteins - pores, gated channels and pumps

For a complete list of videos, visit our video library