The suggestion that a seller will try to set price based on “what the

The suggestion that a seller will try to set price based on “what the market will bear” is explicit recognition of the constraint imposed by:

A) the firm’s marginal cost of production.
B) the price elasticity of demand for that item.
C) the firm’s competitors.
D) the need for most firms to earn positive economic profits over time if they are to remain in business.

ANSWER

B