Which of the following correctly explains why sellers in a ...

[james9437]

Which of the following correctly explains why sellers in a perfectly competitive market are price takers?
 a. There are few sellers, and so they have the power to take whatever price they want.
  b. There are many sellers, and so the market process generates an equilibrium price that cannot be influenced by any one seller. Thus they have no choice but to take the price generated by the market process.
  c. Sellers in a competitive market have the power to influence price by colluding with one another and using quotas to limit overall market output and thus raise price.
  d. Individual buyers in a competitive market have the power to influence price, and thus can impose prices and other conditions on powerless sellers.

Question 2

A lower price elasticity of demand coefficient occurs when:
 a. many substitutes exist.
  b. the quantity demanded is more responsive.
  c. few substitutes exist.
  d. the market is broadly defined.

[dantucker]

Answer to Question 1

b

Answer to Question 2

c

[james9437]

Thanks for the timely response, appreciate it

[robbielu01]

Great answer, keep it coming