🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Economics
2
answers
0
watching
213
views

Why would a firm in a perfectly competitive market always choose to set its price equal to the current market price? If a firm sets its price below the current market price, what effect would this have on the market?

Watch
2
answers
0
watching
213
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share
Darryn D'Souza
Darryn D'SouzaLv10
30 Sep 2019
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

What would happen to a perfectly competitive form if they set the price above the market price? What would happen to a perfectly competitive firm if they set the price below the market price? What does this indicate about the level of market power that a competitive firm has?

State whether the below sentence is True/False :

For a firm in a perfectly competitive market, the price of the good is always equal to its Marginal Revenue.

1. If the ATC curve is above the demand curve in a perfectly competitive firm, the firm will have a:
- profit
- loss
- break-even
- price floor
 
2. If the ATC curve is below the demand curve in a perfectly competitive firm, the firm will have a:
- profit
- loss
- break-even
- price ceiling
 
3. Even if in the short run, a perfectly competitive firm has a profit; in the long run, they always break even because:
- low barriers to entry
- profit incentives attract new firms
- perfectly homogenous products
- all of the above
 
4. A perfect competitor would:
- never charge above market price but might charge below market price
- never charge below market price but might charge above market price
- always change the market price
- none of the above
 
5. The crucial aspect of competition among firms that leads to the condition of zero profits in the long run is
- the number of firms in the industry is fixed
- free entry and exit of firms in the industry
- fixed costs equal zero
- all costs are at their least cost level.
 

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in