Which of the Following Correctly Explains Why Sellers in a Perfectly

question 87

Multiple Choice

Which of the following correctly explains why sellers in a perfectly competitive market are price takers?

• A) There are few sellers, and so they have the power to take whatever price they want.
• B) There are many sellers, and so the market process generates an equilibrium price that cannot be influenced by any one seller. Thus they have no choice but to take the price generated by the market process.
• C) Sellers in a competitive market have the power to influence price by colluding with one another and using quotas to limit overall market output and thus raise price.
• D) Individual buyers in a competitive market have the power to influence price, and thus can impose prices and other conditions on powerless sellers.

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Definitions:

Special Meeting

A meeting called for a specific purpose, distinct from regular meetings, often to address urgent issues within an organization.

Derivative Suit

A lawsuit brought by a shareholder on behalf of a corporation against a third party, often the corporation's executives or directors, due to failure in their corporate duties causing harm to the company.

Similarly Situated Shareholders

Shareholders in a corporation who are in comparable positions, typically concerning their rights and interests.

Current Shareholder

An individual or entity that currently owns shares in a company.