Which of the Following Best Explains Why a Firm in a Perfectly

question 113

Multiple Choice

Which of the following best explains why a firm in a perfectly competitive market must take the price determined in the market?

• A) The short-run average total costs of firms that are price takers will be constant.
• B) If a price taker increased its price, consumers would buy from other suppliers.
• C) Firms in a price-taker market will have to advertise in order to increase sales.
• D) There are no good substitutes for the product supplied by a firm that is a price taker.

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Definitions:

Mount St. Helens

An active stratovolcano located in Washington State, USA, famous for its catastrophic eruption on May 18, 1980.

Steep-Sided Cone

A type of volcanic mountain with steep sides, typically formed from eruptions that deposit large amounts of volcanic material around the vent.

Composite Volcano

A volcano known for its explosive outbursts, made up of alternating strata of ash and lava.

Convergent Boundary

A region where two or more tectonic plates are moving toward each other, often causing one plate to slide beneath the other.