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 that elicits customer loyalty.
D) Its product is slightly different from those of its competitors.

Question

Quizplus · Accepted Answer

A purely competitive producer is a price taker and cannot influence the market price of its product. Therefore, it has no incentive to advertise as it cannot increase demand for its product.

Which of the Following Statements Applies to a Purely Competitive