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Read these lines: "In a perfectly competitive market, firms sell their products at prices determined solely by forces beyond their control. A firm that raised its price even a little above the going rate would lose customers." As it is used in the quoted lines, "the going rate" most nearly means:
Athe fee a firm pays to enter a new market
Bthe speed at which customers leave a firm
Cthe price currently charged across the market
Dthe wage that firms pay their salespeople
Answer & Solution
Correct answer: C. the price currently charged across the market
1. The quoted lines are about the prices firms charge, set by forces beyond any one firm's control.
2. Raising a price above the going rate is what drives customers away, so the going rate must be the price everyone else is currently charging.
3. Entry fees, customer speed, and wages do not fit a sentence about raising a price above a rate.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.7 Competing in a Free Market_
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