Which of the Following Is a True Statement About the Difference

question 118

Multiple Choice

Which of the following is a true statement about the difference between a price-taker firm and a competitive price-searcher firm in the long run?

• A) Both will sell their products at a price equal to average total cost, but only the price taker will produce at minimum average total cost.
• B) Both will sell their products at a price equal to average total cost, but only the competitive price searcher will produce at minimum average total cost.
• C) Only the price taker will sell its product at a price equal to average total cost.
• D) Only the competitive price searcher will sell its product at a price equal to average total cost.

---

Definitions:

Capital Asset Pricing Model

A financial model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Security's Beta

A measure of a security's volatility relative to the overall market or a specified benchmark.

Expected Rate

The anticipated rate of return or growth, often used in the context of investments or economic forecasts.