For a competitive market, a:. a seller can always increase her profit by raising the price of her product. b. if a seller charges more than the going price, buyers will go elsewhere to make their purchases. c. a seller often charges less than the going price to increase sales and profit. d. a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.

Question

Business

Dominik Freeman

1 February, 01:54

For a competitive market, a:. a seller can always increase her profit by raising the price of her product. b. if a seller charges more than the going price, buyers will go elsewhere to make their purchases. c. a seller often charges less than the going price to increase sales and profit. d. a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.

+3

Answers (1)

Know the Answer?

Jamie Kirby · Answer 1

Answer: b. if a seller charges more than the going price, buyers will go elsewhere to make their purchases

Explanation:

A competitive market is characterised by:

1. Firms in the market been price takers.

2. No barriers to entry or exit.

3. Perfect homogenous products.

Because goods in a competition market are homogenous, if a firm increases it's price, customers would go and buy the product from the firm that sells at the market price.

Also firms in a competitive market are price takers, so they cannot set the market price.