Which of the following is a characteristic of a competutive market? a Buyers and

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Which of the following is a characteristic of a competutive market? a Buyers and sellers are price takers There e many buyers but few sellers O c Many firms have market power because they own patents O d Firms sell dafferentiated products. 4points Save Answr QUESTION 25 Consider a firm that operates in a perfectly competitive market Currently the firm is producing 300 units of output and the price is $20. If marginal cost a 300 units is $22, the firm O a could increase profits by increasing output from 300 units O b could ingrease profits by reducing output from 300 units should shut down, since it must be losing money O d should decide to increase the price above $20 Cliek Save and Submit to save and submit. Chick Save All Anvers to sve all anseers Save All Answers Save and Submit 651 AM 2/3/2017 COMPUTERHELP 1944-3472545 do

Explanation / Answer

(Question 24) Option (a)

Since there are many buyers and many sellers, each buyer and seller has no market power and accept the market price as given.

(Question 25) Option (b)

When MC > Price, there is a marginal loss that can be reduced by lowering output until P = MC.

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