Harry Smith Sells Wheat in a Price-Taker Market

question 181

Multiple Choice

Harry Smith sells wheat in a price-taker market. With regard to Smith's price and output choices, which of the following is true?

• A) Smith will constantly attempt to increase the price of his product so he can increase his total revenue.
• B) Since the price of his product is dictated by the market, Smith will not have an incentive to control per-unit cost.
• C) Since the price of his product is dictated by the market, Smith has no production decisions to make.
• D) It would be senseless for Smith to try to increase sales by lowering the price of his product.

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Definitions:

Applied Psychology

The use of psychological methods and findings to solve practical problems of human and animal behavior and experience.

Behaviourism

A theory of learning which states that all behaviors are acquired through conditioning, emphasizing external factors over internal traits.

Functionalism

A perspective in psychology that focuses on how mental and behavioral processes function to enable individuals to adapt to their environments.

Animal Training

The practice of teaching animals specific responses to specific conditions or stimuli, often used for companionship, service, or entertainment.