In the Price-Taker Model, What Impact Does the Individual Firm

question 16

Multiple Choice

In the price-taker model, what impact does the individual firm have on the price of its product?

• A) The firm must accept the price determined in the market if it is going to sell its product.
• B) The firm may raise or lower its price to a small extent, but sales revenues will tend to be the same regardless of price.
• C) The firm may raise its price and, thereby, increase its revenues.
• D) The firm may raise or lower its price to a considerable extent, but sales revenues will tend to be the same regardless of price.

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Definitions:

Cultural Barriers

Challenges and obstacles that arise in cross-cultural communication and interaction due to differences in language, norms, and customs.

Language Barriers

Challenges to communication that occur when people who have no language in common attempt to converse.

Subsidiary

A “child” company to a parent company; the parent company owns 100% of the subsidiary’s operations.

International Business

Commercial transactions that occur across country borders, involving the trade of goods, services, technology, capital, or knowledge.