A Price-Taking Firm Cannot Affect Its Own Output Price Because

question 176

Multiple Choice

A price-taking firm cannot affect its own output price because

• A)price is determined by consumers, not producers.
• B)market demand is perfectly elastic; that is, even a tiny increase in price results in zero quantity demanded.
• C)it is only one firm among many, so the price is determined in the market as a whole.
• D)consumer preferences dictate a single price in a competitive market.
• E)of government statutes, such as price floors and price ceilings.

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Definitions:

Earned Surplus

The portion of a company's net income that is retained for reinvestment, rather than being distributed as dividends to shareholders.

MBCA

Model Business Corporation Act, a recommendation for state law on corporations, providing a template for corporate governance and operations.

Net Asset Test

A financial assessment to determine a company's or individual's net worth by subtracting total liabilities from total assets.

Revised Act

Refers to legislation that has been updated or amended to incorporate changes or new provisions since its original enactment.