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:

Judgement

The ability to make considered decisions or come to sensible conclusions, often evaluating evidence or the application of logic.

Group Membership

The state or condition of being a part of a collective group, where members often share common interests, goals, or characteristics.

Negative Attitude

A general disposition of being discontent or pessimistic towards people, situations, or life in general, often resulting in adverse outcomes.

Older People

Persons of advanced age, often considered to be those who have lived beyond the average lifespan of human beings, and who experience unique social, economic, and health-related challenges.