Which of the following best explains why a firm in a perfectly competitive market must take the price determined in the market?
a. The short-run average total costs of firms that are price takers will be constant.
b. If a price taker increased its price, consumers would buy from other suppliers.
c. Firms in a price-taker market will have to advertise in order to increase sales.
d. There are no good substitutes for the product supplied by a firm that is a price taker.
b
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Refer to the figure above. What is the price effect of a price increase from $3 to $5?
A) $200 B) $400 C) $800 D) $1,000
In chapter 20, the expected future nominal exchange rate in the long run say, Eet+n, is assumed to be the nominal exchange rate at which
A) the current account is in balance. B) the future rate of appreciation or depreciation is constant. C) domestic and foreign price levels are equal. D) one unit of foreign currency exchanges for one unit of domestic currency. E) none of the above