Which of the Following Best Explains Why a Firm in a Competitive

question 194

Multiple Choice

Which of the following best explains why a firm in a competitive price-taker market must take the price determined in the market?

• A) The short-run average total costs of firms that are price takers will be constant.
• B) If a price taker increased its price, consumers would buy from other suppliers.
• C) Firms in a price-taker market will have to advertise in order to increase sales.
• D) There are no good substitutes for the product supplied by a firm that is a price taker.

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Definitions:

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The mechanical component used to transmit power from an engine or motor to the propeller in a boat or aircraft.