When Consumers Act as Price-Takers, We Say That They Behave

question 70

Multiple Choice

When consumers act as price-takers, we say that they behave

• A) cooperatively.
• B) competitively.
• C) monopolistically.
• D) irrationally.
• E) rationally.

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Definitions:

Break-Even Point

The level of production or volume of sales at which total costs and total revenue are equal, resulting in no net loss or gain.

Variable Expenses

Variable expenses fluctuate with business activity levels, such as materials and labor costs, which increase as production increases.

Fixed Expenses

Costs that do not vary with changes in production volume or sales, such as rent, salaries, and insurance.

Profit

The financial gain realized when the revenue generated from a business activity exceeds the costs, expenses, and taxes needed to sustain the activity.