A Price Taker Is a Firm That

question 22

Multiple Choice

A price taker is a firm that

• A) seeks to maximize revenue rather than profit.
• B) cannot influence the market price.
• C) searches for the best price and then takes the highest profits possible.
• D) buys inputs for firms.

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Definitions:

Destroy Incentives

To eliminate or significantly reduce the motivations or reasons for individuals or entities to take a particular action or endeavor.

Society's Resources

The total means available to a society, including natural resources, human capital, and manufactured goods, used for production and consumption.

Free-Market System

An economic system where prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.

Wage

The amount of money paid to an employee by an employer in exchange for work performed, usually expressed on a per-hour, per-day, or per-project basis.