In its effort to maximize economic profit,a firm characterized as a price setter must determine:
A)only the price it should charge.
B)only the quantity it should produce.
C)both the price it should charge and the quantity it should produce.
D)neither the price it should charge and the quantity it should produce as these are both determined by forces beyond the firm's control.

Question

Quizplus · Accepted Answer

A firm that is characterized as a price setter has some control over the price and quantity it produces. It has the ability to adjust the price of its product based on the various market conditions and consumer demand. Additionally, it can decide how much to produce in order to maximize its profits. Therefore, the firm must determine both the price it should charge and the quantity it should produce.

In Its Effort to Maximize Economic Profit,a Firm Characterized as a Price