Exhibit 24-9

-Refer to Exhibit 24-9.The reason we know the firm represented in the exhibit is a price searcher and not a price taker is because

Question

Exhibit 24-9
 
-Refer to Exhibit 24-9.The reason we know the firm represented in the exhibit is a price searcher and not a price taker is because

Quizplus · Accepted Answer

The exhibit shows a downward-sloping demand curve indicating that the firm is facing a market where it has some control over the price. This suggests that the firm is a price searcher rather than a price taker. Additionally, the fact that marginal revenue is not constant for all given levels of output (option C) further supports this conclusion. As for option B, it is also true that the firm may need to lower the price to sell additional units in a price-searcher market, but this is not necessarily a distinguishing characteristic between price-taker and price-searcher firms. Finally, options A and D are not necessarily indicative of a price searcher; a firm that experiences increasing total costs as more output is produced and sold or earns negative profit can be either a price taker or a price searcher.

Exhibit 24-9 -Refer to Exhibit 24-9.The Reason We Know the Firm Represented