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Questions -
Q1. What is the difference between firms that are price takers and those that are price searchers?
Q2. Why is marginal revenue constant for the firm in a price taker market?
Q3. In the long-run economic profits in a price taker market will tend toward zero. Why?
Q4. What determines the output of a price searcher firm? Is this unique to the price searcher market?
Q5. What are contestable markets? Can contestable markets be competitive when there is room for only one or two rival firms?
Q6. Why is the marginal revenue curve downward sloping for the firm in a price searcher market? Also, why is it less than the demand curve?
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