Consider the following three statements. Are they true or false? (1) (True or False) In a...
Consider the following three statements. Are they true or false?
(1) (True or False) In a price-taker market, all firms produce an identical product and each firm comprises only a very small portion of the total market.
(2) (True or False) If a price-taker firm wants to sell its output, it must accept the market price, but it can sell as much output as it wishes at that market price.
(3) (True or False) For a price-taker firm, its marginal revenue from the sale of an additional unit is generally less than the market price.
Homework Answers
a) true, in the price taker market I.e. perfectly competitive market firms produce identical product and each firm comprises only a small portion of the total output.
b) True,the price taker firm can sell as much goods as possible at the given price
c) False, as the price is not changing the marginal revenue earned by the firm is same as the market price.
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