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Which of the Following Statements Is (Are) TRUE of Price-Taking

question 140

Multiple Choice

Which of the following statements is (are) TRUE of price-taking firms?
I. ΔTR/ΔQ = P = MR
II. Price takers must lower their price to sell additional units of output because demand curves slope downward.
III. If a price taker decides to increase output, the market price will decrease.
IV. Examples of price takers include McDonald's, Burger King, Wendy's, and SONIC Drive-in.


Definitions:

Common Value Auctions

Auctions in which the item for sale has a value that is equally unknown to all bidders, but ultimately, the value is the same for everyone.

Bidders

Individuals or entities that offer to pay a specific price for goods, services, or assets, often in the context of an auction.

Bid-rigging

A form of fraud where competing parties conspire to determine the winner of a bidding process.

Cartels

An agreement among competing firms to control prices or exclude entry of a new competitor in a market.

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