Which of the following best describes a price setter?
A)Firms in perfect competition
B)Pricing of products that are not standardized
C)Firms setting prices equal to the market price
D)Firms setting price equal to the aggregate price level

Question

Quizplus · Accepted Answer

Price setters are firms that have the ability to set their own prices because their products are not standardized or differentiated from their competitors. This allows them to charge a premium price for their unique product, which is not possible in perfect competition where prices are set by the market. Firms may also set prices above or below the market price depending on their market power and strategic goals. The aggregate price level (D) refers to the overall level of prices in the economy, which is determined by factors such as inflation and the money supply, and is not directly related to a single firm's pricing decisions.

Which of the Following Best Describes a Price Setter