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:

Profitability

A measure of the efficiency of a company or business in generating profits relative to its revenue or assets.

Authenticity

The quality of being genuine, true, or real, often used in the context of objects, experiences, and personal identities.

Corporate Pressure

Corporate pressure involves the influence that companies can exert on individuals, other businesses, and governments, often to achieve certain business goals or to sway policy decisions in their favor.

Hip-Hop

A cultural movement that began in the 1970s in the Bronx, New York, characterized by four key elements: MCing/rapping, DJing/scratching, break dancing, and graffiti art.