A firm in pure competition will:
A) advertise its product to tell potential customers about its unique product.
B) be able to set its own price level.
C) have to accept the going price.
D) be able to increase its total revenue only by lowering its price.
E) All of the above.

Question

Quizplus · Accepted Answer

In pure competition, there are many sellers offering the same product, so the firm cannot control the price. They have to accept the going market price in order to sell their product. Advertising may be used to inform potential customers about the product, but it cannot be used to create a unique product differentiation. The firm cannot raise prices as there are many competitors offering the same product.

A Firm in Pure Competition Will