Question

Imperfect competitors can justify not restricting output to the profit maximizing level because:

a)  They want to maximize long term profits.

b)  They are concerned about avoiding a possible anti-trust suit.

c)  They are concerned about other firms entering the market.

d)  Any of the above.                                                                         

e)  None of the above.

Answer 1

imperfect competitiors are always worried about their market power and their market share such as in the case of monopolistic competition and in this case is the firm hold a certain amount of market power in order to protect that they can price their products low below the profit-maximizing price as a result of which day can restrict the competitors out of the market on the whole and in this regard, there is also a chance that they are keeping their profit levels low in order to increase the customer base so that their long-term profits can increase and that is also the reason. what from that is a firm hold a market power there is a chance that it shouldn't get to merge with firms elephant produces the profit-maximizing output there is a chance that it has to surrender to other firms who is practicing predatory pricing and with this merger can take place and this can result in antitrust practices and in order to avoid this the firm can also follow the market leader.

In this regard (d) any of the above is the answer to this question