Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 13, Problem 1CQQ
To determine
The characteristic of the perfect competitive firm.
Expert Solution & Answer
Answer to Problem 1CQQ
Option ‘c’ is correct.
Explanation of Solution
Option (c):
The competitive firm deals with the large number of buyers and sellers who trade homogeneous commodities, and the price is fixed by the market
Option (a):
A profit-maximizing price is set at the point where the marginal revenue of the firm is equal to marginal cost. But in the competitive market, price is set by the equilibrium between the market demand and supply. Thus, option ‘a’ is incorrect.
Option (b):
Undercut price is done in an oligopoly. Thus, option ‘b’ is incorrect.
Option (d):
The largest market share is the driven motive for the managers whose remuneration is based on the sales revenue. Thus, option ‘d’ is incorrect.
Economics Concept Introduction
Concept introduction:
Perfect competitive firm:
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Chapter 13 Solutions
Essentials of Economics (MindTap Course List)
Ch. 13.1 - Prob. 1QQCh. 13.2 - How does a competitive firm determine its...Ch. 13.3 - Prob. 3QQCh. 13 - Prob. 1CQQCh. 13 - Prob. 2CQQCh. 13 - Prob. 3CQQCh. 13 - Prob. 4CQQCh. 13 - Prob. 5CQQCh. 13 - Prob. 6CQQCh. 13 - Prob. 1QR
Ch. 13 - Prob. 2QRCh. 13 - Prob. 3QRCh. 13 - Prob. 4QRCh. 13 - Prob. 5QRCh. 13 - Prob. 6QRCh. 13 - Prob. 7QRCh. 13 - Prob. 8QRCh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Prob. 3PACh. 13 - Prob. 4PACh. 13 - Prob. 5PACh. 13 - A firm in a competitive market receives 500 in...Ch. 13 - Prob. 7PACh. 13 - Prob. 8PACh. 13 - Prob. 9PACh. 13 - Prob. 10PACh. 13 - Suppose that each firm in a competitive industry...
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