A Factor Price Taker Is a Firm That

question 3

Multiple Choice

A factor price taker is a firm that

• A)can sell as many units of its good as it wants without affecting price.
• B)sells fewer units of its good at higher prices than lower prices.
• C)can buy all of a factor it wants at the equilibrium price.
• D)drives up factor price if it buys an additional factor unit.

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Definitions:

Profit-Maximizes

Refers to the strategy or the condition where a firm adjusts its production and pricing to achieve the highest possible profit.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Profit-Maximizes

A strategy or behavior adopted by firms aiming to achieve the highest possible profit given their resources and market conditions.

Price

The fee anticipated, needed, or handed over as payment for a service or product.