It would be reasonable for a typical purely competitive wheat farmer to lower his price per...
Question:
It would be reasonable for a typical purely competitive wheat farmer to lower his price per bushel in order to sell more. The higher sales level will cause average fixed cost to decrease and this will result in more profit for the individual farmer.
True or false, and why?
Pure competition
Pure competition is a form of market structure in which there are a large number of buyers and sellers in the economy who produce homogeneous products. They are the price-takers and cannot influence the price prevailing in the market. There is no restriction on the entry or exit of a firm in an industry.
Answer and Explanation: 1
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View this answerThe first statement is false.
Under a purely competitive market, it is not in the hands of a supplier or a consumer to change the level of prices....
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Pure Competition: Definition, Characteristics & Examples
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Chapter 3 / Lesson 65
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Learn how to classify pure competition, or perfect competition, within a market. See a pure market definition, characteristics, and pure competition examples.
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