Use the following to answer question(s):
Exhibit: The Market for Carrots

-(Exhibit: The Market for Carrots) If this is a perfectly competitive market, which of the following is true?

Question

Use the following to answer question(s): 
Exhibit: The Market for Carrots
 
-(Exhibit: The Market for Carrots) If this is a perfectly competitive market, which of the following is true?

Quizplus · Accepted Answer

In a perfectly competitive market, equilibrium price and output are determined by the intersection of the market demand and supply curves. Each firm is a price taker and has no power to set prices. The supply curve is determined by the marginal cost curve, not the average total cost curve. There is no indication in the exhibit that the price is too high.

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