Answered: Perfectly competitive firms have a…

Perfectly competitive firms have a price elasticity of demand around A. 0.00006. B. 0.6. OC. 1.0. O D. 64.0. O E. 64,000.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 33CTQ: Since a perfectly competitive firm can sell as much as it wishes at the market price, why can the...

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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

Question

Perfectly competitive firms have a price elasticity of demand around:
A. 0.00006.
B. 0.6.
O C. 1.0.
D. 64.0.
E. 64,000.

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