GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In the perfect competition at short run, the firm is a price ____ and can sell____ amount of output at the going market price.
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Taker, any
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Maker, Any
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Taker, a definite
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None of the above
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Explanation:
Detailed explanation-1: -In the model of perfect competition, we assume that a firm determines its output by finding the point where the marginal revenue and marginal cost curves intersect. Provided that price exceeds average variable cost, the firm produces the quantity determined by the intersection of the two curves.
Detailed explanation-2: -A perfectly competitive firm is a price taker, which means that it must accept the equilibrium price at which it sells goods. If a perfectly competitive firm attempts to charge even a tiny amount more than the market price, it will be unable to make any sales.
There is 1 question to complete.