Asked by Diante Pierce on Jul 22, 2024
Verified
Which of the following is true for a competitive buyer?
A) AE = ME
B) AE > ME
C) AE < ME
D) AE greater than or equal to ME
Competitive Buyer
A buyer in a market who cannot influence the market price and takes the price as given.
Marginal Expenditure
The rise in expense from obtaining one more unit of a good or service.
Average Expenditure
The total spending divided by the number of units bought, used to calculate the average cost of goods or services.
- Compare and contrast the powers held by monopolies and monopsonies in market environments.
Verified Answer
LA
Linda AwuyehJul 26, 2024
Final Answer :
A
Explanation :
In a competitive market, a buyer's average expenditure (AE) equals the marginal expenditure (ME), because the price remains constant regardless of the quantity purchased.
Learning Objectives
- Compare and contrast the powers held by monopolies and monopsonies in market environments.