Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 22.1, Problem 1ST
To determine

Explain the statement.

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Tom, a math major, examines Jane's economics class notes and observes that when price-taking firms earn economic profit, they do not seem to produce a quantity that minimizes theircosts. Is he correct?Is there significance to this observation?
With the aid of diagrams, explain what it means for a firm to be a price taker.
In class we said that the firms like firm X in perfect competition are price takers, it implies that if firm X raises its price, what will happen?
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