Firms that exhibit priceminustaking behavior A. are independently capable of setting price. B. wait for other firms to set price, take it as given, and charge a higher price. C. take pricing behavior in their own hands. D. have outputs that are too small to influence market price and thus take it as given.

Question

Jaiden Hood

Business

25 October, 16:16

Firms that exhibit priceminustaking behavior A. are independently capable of setting price. B. wait for other firms to set price, take it as given, and charge a higher price. C. take pricing behavior in their own hands. D. have outputs that are too small to influence market price and thus take it as given.

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Answers (1)

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Armani Meyer · Answer 1

D. have outputs that are too small to influence market price and thus take it as given.

Explanation:

In perfect competition there are large number of firms and individual contribution is less in industry output, it means that firms have output which are too small to influence the market price ans thus it is as given.

Hence,

The firms which exhibit price - taking behavior have the output which is too small to be influenced by the market price, and therefore remains as it is.