In a Competitive Price-Taker Market, the Actions of Any Single

question 34

Multiple Choice

In a competitive price-taker market, the actions of any single buyer or seller will

• A) have a negligible impact on the market price.
• B) have little effect on overall production but will ultimately change final product price.
• C) cause a noticeable change in overall production and a change in final product price.
• D) adversely affect the profitability of more than one firm in the market.

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Definitions:

Stagflation

A condition of slow economic growth and relatively high unemployment accompanied by rising prices, or inflation, challenging the usual economic assumptions.

Permanent Income

A theory suggesting that an individual's consumption choices are based on their long-term income expectations rather than their current income.

Economic Decisions

Refers to choices made by individuals, businesses, or governments regarding allocation of resources to satisfy various needs and wants.

Aggregate Supply

The total supply of goods and services available to a particular market from producers at different price levels.