If competing price searchers adjust their own prices on the basis of a close monitoring of their rival's prices,
A) all prices will tend to be the same, which proves prices are not competitive.
B) all prices will tend to be the same, which proves sellers are not competing on price.
C) each price searcher's demand curve will be indeterminate.
D) prices will fluctuate regularly.
E) prices will rise when costs increase but will not fall when costs decrease.
Question 2
Which of the following statements is true?
A) A monopoly is a price taker because it faces a downward sloping demand curve.
B) A monopoly is a price maker because it faces a downward sloping demand curve.
C) A perfectly competitive firm is a price taker because it faces a downward sloping demand curve.
D) A perfectly competitive firm is a price maker because it faces a downward sloping demand curve.
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