Who Is a Price Taker in a Competitive Market

question 160

Multiple Choice

Who is a price taker in a competitive market?

• A)buyers only
• B)sellers only
• C)both buyers and sellers
• D)neither buyers nor sellers

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Definitions:

Perfectly Competitive Industry

An industry characterized by many small firms, identical products sold by all firms, no barriers to entry or exit, and perfect information among consumers and producers.

AC

Short for Air Conditioning, a system for controlling the humidity, ventilation, and temperature in a building or vehicle.

Price Effect

The impact on consumer behavior and purchase decisions resulting from a change in the price of a good or service.

Quantity Effect

The variation in overall income derived from altering the amount of a product sold, while keeping its price stable.