If a Price-Taker Firm Selling in a Competitive Market Offers

question 13

Multiple Choice

If a price-taker firm selling in a competitive market offers its product at a higher price than others, it will

• A) increase its profits.
• B) maintain its profit base if the demand for the product is inelastic.
• C) be able to expand output.
• D) not be able to sell any output.

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Definitions:

Power

The ability or capacity to do something or act in a particular way; often refers to the amount of control one has over circumstances or other entities.

Planes

A flat or relatively smooth surface; points of reference by which positions or parts of the body are indicated.

Points Of Reference

Specific locations or landmarks used to establish positions or to measure distances.

Lesion

An injury or wound; a circumscribed area of pathologically altered tissue.