In a competitive industry,the competitive firm's profits are
A)independent of the industry in which they compete
B)closely linked to the industry in which they compete
C)determined only by their own differentiated product
D)determined solely by the inelastic demand for their product

Question

In a competitive industry,the competitive firm's profits are​
A)​independent of the industry in which they compete
B)closely linked to the industry in which they compete
C)determined only by their own differentiated product
D)​determined solely by the inelastic demand for their product

Quizplus · Accepted Answer

Competitive firm's profits are closely linked to the industry in which they compete as they have to sell their products at the prevailing market price. The higher the competition in the industry, the lower the profit margins for the competitive firms. The market demand and supply conditions determine the industry's prevailing market price, which affects the competitive firm's profitability.

In a Competitive Industry,the Competitive Firm's Profits Are​

In a Competitive Industry,the Competitive Firm's Profits Are