Re: ISI 2017 key

Posted by Asd1995 on May 23, 2017; 1:36pm
URL: http://discussion-forum.276.s1.nabble.com/ISI-2017-key-tp7604137p7604633.html

Beg to differ on 25th. Firm A can operate in a competitive market with p=1.

However firm B, on increasing output increases its revenue, so it makes positive profits hence can't work as a competitive market entity. It can flood the market at the "competitive price" or offer a little lower price than the marginal cost of "competitive" producers hence capture the whole market.