BLD Inc. produces pure bottled water. The industry has experienced rapid growth as fitness conscious consumers demand these types of products. The growth has attracted many competitors to the industry. However, marketing campaigns to differentiate their products have proven unsuccessful. The main cost to producers is the filtering system that is required to purify the water. The demand for the filtering systems, as a result of industry growth, has led to a reduction in the cost of the systems. Indicate whether the pure bottled water market is best described as a price searcher or price taker and state whether the long-run supply curve is downward-or upward-slopping. Pure bottled water makerLong run supply curve（）①A. Price searcher Downward-sloping ②B. Price takerDownward-sloping ③C. Price searcher Upward-sloping
A. ①
B. ②
C. ③
参考答案：B
解析：
The pure bottle water market meets the four conditions (large number of competitors, similar product, no company has a dominant market share, no barriers to enter or exit) of the price taker model. Increased volume for filtering systems has reduced their cost. Since the industry cost curve is decreasing, the long run supply curve is downward-sloping. If the industry cost curve were increasing the long run supply curve would be upward-sloping.