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Author Question: The demand curve an individual competitive firm faces is known as its A) excess demand curve. B) ... (Read 101 times)

dejastew

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on: Jul 1, 2018
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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Reply #1 on: Jul 1, 2018
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
Great answer, keep it coming :)

smrtceo

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Reply 3 on: Yesterday
Excellent

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