A Firm That Is a Price Taker Can Sell

question 59

Multiple Choice

A firm that is a price taker can sell

• A)any quantity of product it wants at any price.
• B)less of its product at a higher price than at a lower price.
• C)any quantity of product it can produce at the market equilibrium price.
• D)more of its product at a higher price than at a lower price.
• E)none of the above

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Definitions:

Market Potential

An estimate of the maximum total sales of a product or service that could be achieved within a specific market segment over a certain time period.

Market Saturation

A situation in which a product or service has become so widespread that the market is considered fully served, limiting further growth.

Actual Market

The existing market where a company's products or services are currently being sold, as opposed to potential new markets.

Contribution Margin

The amount by which the sale of a product or service exceeds its production and selling costs, indicating how much contributes to covering fixed costs and generating profit.