Suppose Mara and David compete, selling fried green tomatoes in a perfectly competitive market. If Mara increases output,
A) David must reduce output
B) the price David can charge falls
C) the price David can charge rises
D) the price David can charge is unaffected
E) David's economic profit must fall

Question

Quizplus · Accepted Answer

In a perfectly competitive market, individual sellers are price takers, meaning the market price is determined by the overall market supply and demand, not by the output of a single seller. Therefore, Mara increasing her output does not affect the price David can charge.

Suppose Mara and David Compete, Selling Fried Green Tomatoes in a Perfectly