Answer to Question #303026 in Macroeconomics for Shazly

Question

To sustain in a perfectly competitive market, a firm should:

Answer 1

To sustain in a perfectly competitive market, a firm should produce differentiated products, target new markets, carry out research to have full knowledge of the market, and provide quality products. Differentiated products provide customers with options to choose from broadening the customer base, while targeting new markets increases the profits of the firm and also expands the market share of the firm, which can make the firm to enjoy economies of scale. Full knowledge of the market makes the firm to identify the opportunities and weaknesses of the market and other firms, which they can exploit to gain competitive advantage while providing quality products attract customers since better quality is always prioritized even if the products being offered are similar in nature. When a firm observes all these, then they can survive in a perfectly competitive market.