Amy runs a business in a market where all firms are price takers. Bill suggests that she lower her price to attract even more business. Should Amy follow Bill's suggestion, or should she even consider raising her price?
If Amy lowers her price, this will reduce her total revenue. Since she can sell all of her product at the market price, there is no reason to sell at a lower price. Because of the nature of this market structure, she would lose all her business at a higher price, as her customers went to her competitors to purchase identical products. There is a reason for calling Amy a price taker.
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The table above shows the demand for labor and supply of labor schedules for low-skilled labor. If the labor market is competitive, what is the wage rate of low-skilled labor and what is the quantity of low-skilled labor employed?
A) $6 an hour; 60 hours a day B) $6 an hour; 65 hours a day C) $4 an hour; 70 hours a day D) $4 an hour; 55 hours a day
Despite dramatic increases in trackage during the antebellum period, the U.S. was slow to develop an integrated railroad system. This was primarily due to
a. the opposition of municipal governments to railroads. b. the opposition of the federal government to railroads. c. the failure to adopt a standard gauge for track. d. heavy taxes on railroad companies.