Why is a firm in perfect competition a price taker?
What will be an ideal response?
One firm's output is a perfect substitute for another firm's output and each firm is a small part of the market. These points imply that each firm cannot unilaterally influence the market price at which it can sell its good or service. It must accept, or "take" the market equilibrium price—hence the term, price taker.
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If two nominal exchange rates are given as 4 shekel/dollar and 0.711 dinar/dollar, so 1 dollar can buy either 4 shekels or 0.711 dinars, then each Jordanian dinar is worth ________ Israeli shekels, and each shekel is worth ________ dinars.
A. 5.623; 0.178 B. 0.178; 5.623 C. 1.96; 0.51 D. 0.51; 1.96
John is a seller in an affiliated-values auction environment where bidders are risk neutral. Which auction yields John the greatest expected revenue?
A. English B. Second price C. First price D. All of the choices are revenue equivalent.