In arriving at the quantity of output and price of its product, a company
A)chooses either output or price, and consumer demand determines the other.
B)has no control over either quantity or price.
C)makes two decisions by setting both optimal output and optimal price.
D)generally leaves both quantity and price decisions to consumers.

Question

Quizplus · Accepted Answer

In most market structures, except for perfectly competitive markets, firms have some degree of control over their pricing and output decisions. However, they cannot independently set both price and quantity without considering market demand. Typically, a firm chooses either the price or the quantity of its product, and then the market demand determines the other variable. For example, in a monopolistic or oligopolistic market, a firm might set the price of its product based on its perceived demand curve, and then the quantity sold is determined by consumer demand at that price. Conversely, a firm could choose the quantity to produce, and the market would then set the price based on demand for that quantity.

In Arriving at the Quantity of Output and Price of Its