When a Firm Is Considered to Be a "Price Taker

question 59

Multiple Choice

When a firm is considered to be a "price taker" that means that the firm

• A) will accept ("take") the lowest price that its customers offer.
• B) cannot influence the market price of the good it sells.
• C) pays a fixed price for all of its inputs.
• D) can charge any price it wants to charge, that is, "take" any price it wants.

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Definitions:

Hedonic-Utilitarian

A dichotomy in consumer behavior contrasting pleasure-seeking motives (hedonic) with functional or practical motives (utilitarian) in decision making.

Approach-Avoidance

A psychological conflict that occurs when a goal is both desirable and undesirable at the same time.

Guilty Pleasure

An activity or item that one enjoys despite feeling guilt for enjoying it, usually due to social perceptions or its trivial nature.

Approach-Avoidance

Involves the psychological conflict that occurs when an individual is simultaneously attracted to and repelled by the same object, idea, or action.