Asked by Sulema Benavides on Jul 07, 2024
Verified
Which of the following statements applies to a purely competitive producer?
A) It will not advertise its product.
B) In long-run equilibrium it will earn an economic profit.
C) Its product will have a brand name.
D) Its product is slightly different from those of its competitors.
Economic Profit
The discrepancy between a company's complete income and its aggregate expenditures, covering both out-of-pocket and assumed costs.
Purely Competitive
A market structure characterized by a large number of sellers offering identical products, with easy market entry and exit and no single seller controlling market prices.
- Comprehend the features and presuppositions that underpin perfect competition within market frameworks.
Verified Answer
PH
Phoenix HinesJul 09, 2024
Final Answer :
A
Explanation :
A purely competitive producer is a price taker, meaning it has no control over the market price and must accept the going market price. Therefore, advertising would not affect its sales and would be an unnecessary expense.
Learning Objectives
- Comprehend the features and presuppositions that underpin perfect competition within market frameworks.
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