What is a price taker? A price taker is A. a firm with a perfectly inelastic demand curve. B. a firm that has the ability to charge a price greater than marginal cost. C. a firm that is unable to affect the market price. D. a firm that does not seek to maximize profits.
What is a price taker? A price taker is A. a firm with a perfectly inelastic demand curve. B. a firm that has the ability to charge a price greater than marginal cost. C. a firm that is unable to affect the market price. D. a firm that does not seek to maximize profits.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter10: Price-searcher Markets With Low Entry Barriers
Section: Chapter Questions
Problem 16CQ
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What is a price taker?
A price taker is
A. a firm with a perfectly inelastic demand curve.
B. a firm that has the ability to charge a price greater than marginal cost.
C. a firm that is unable to affect the market price.
D. a firm that does not seek to maximize profits.
E. a firm with a downward-sloping demand curve.
When are firms likely to be price takers?
A firm is likely to be a price taker when
A.
it has market power.
B.
firms in the industry collude.
C.
it sells a differentiated product.
D.
it represents a small fraction of the total market.
E.
barriers to entry are substantial.
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