Question

Because ___________ competitive firms have some control over prices, the firm will charge consumers the price they are willing and able to pay for the available output, which is found by projecting the profit-maximizing output level onto the _______ curve

Answer 1

In a perfectly competitive market, firms have no control over prices and must accept the market price determined by demand and supply. When determining the profit-maximizing quantity of output, firms can charge the price that consumers are willing and able to pay, found by projecting the profit-maximizing output level onto the demand curve.

Step-by-step explanation:

A perfectly competitive firm has no control over prices and must accept the price determined by market demand and supply. In a perfectly competitive market, firms have no control over prices and must accept the market price determined by demand and supply. When determining the profit-maximizing quantity of output, firms can charge the price that consumers are willing and able to pay, found by projecting the profit-maximizing output level onto the demand curve.

As a result, it faces a perfectly elastic demand curve, where buyers are willing to buy any number of units at the market price. When determining the profit-maximizing quantity of output, the firm can look at its perceived demand curve and charge the price that consumers are willing and able to pay, which is found by projecting the profit-maximizing output level onto the demand curve.