Question

Which statement is an accepted insight into imperfect competition? which statement is an accepted insight into imperfect competition?

a. a seller's best choice depends on the actions that other businesses take.
b. market power leads all sellers to accept the market equilibrium price.
c. the higher the number of competitors, the greater the market power of firms.
d. market power grows when a product is standardized and identical across sellers.

Answer 1

In imperfect competition, a seller's decisions are influenced by the actions of other businesses, indicating that they have some degree of market power and strategic interdependence. Therefore correct option is A

Step-by-step explanation:

The question concerns the concept of imperfect competition, which arises when the conditions of perfect competition are not met. In a scenario of imperfect competition, individual firms have some control over the price of their products. Therefore, statement A, "a seller's best choice depends on the actions that other businesses take," is an accepted insight into imperfect competition. Unlike in perfect competition where firms are price takers, in imperfect markets firms must consider the strategic actions of competitors when making decisions.