« previous next »

Author Question: Perfectly competitive firms have total control over the price they set for their product. Explain ... (Read 63 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?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Feedforward control of breathing rate in an animal trained for athletic exercise. Feedforward control of breathing rate in an animal trained for athletic exercise.
Centers for disease control and prevention guidelines Centers for disease control and prevention guidelines
Ginkgo Biloba label. The label indicates the product is standardized to percentages of the two ... Ginkgo Biloba label. The label indicates the product is standardized to percentages of the two ...
How to create a price index to calculate inflation for a basket of goods How to create a price index to calculate inflation for a basket of goods
Finding the length given total distance and distance longer than other point Finding the length given total distance and distance longer than other point
Explain the myogenic autoregulation of the glomerular filtration rate Explain the myogenic autoregulation of the glomerular filtration rate
Video: Attention Deficit Disorder (ADD)

For a complete list of videos, visit our video library