A "Price Taker" Is a Firm That

question 93

Multiple Choice

A "price taker" is a firm that

• A)does not have the ability to control the price of the product it sells.
• B)does have the ability, although limited, to control the price of the product it sells.
• C)can raise the price of the product (above the market price)and still sell some units of its product.
• D)sells a differentiated product.

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Definitions:

Market Failures

Situations where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Private Goods

Goods that are excludable and rivalrous in consumption, meaning access can be limited and consumption by one individual prevents others from consuming the same good.

Public Goods

Goods that are non-excludable and non-rival in consumption, meaning they are available for everyone to consume regardless of who pays and one person's consumption does not reduce availability to others.

Reward Power

The ability of an individual to influence the behavior of others by offering or withholding incentives.