Which of the Following Is a Major Difference Between a Competitive

question 112

Multiple Choice

Which of the following is a major difference between a competitive price searcher and a price taker?

• A) Price takers need to compete through advertising because they cannot choose their own price, whereas competitive price searchers compete primarily through their pricing policies.
• B) Price takers are exposed to competition because of low barriers to entry, whereas competitive price searchers are somewhat immune from competition due to relatively high barriers to entry.
• C) Price takers can never earn economic profits, whereas competitive price searchers can earn economic profits in the short run.
• D) Price takers produce identical goods, whereas competitive price searchers produce goods that are differentiated from the goods produced by their competitors.

---

Definitions:

Productive Farmland

Land that is capable of producing a high yield of crops due to its fertility, favorable climate, or efficient management.

Diminishing Returns

The principle that as an increasing amount of one factor of production is employed, holding all other factors constant, the additional output generated will eventually decrease.

Marginal Productivity

Marginal productivity refers to the extra output, income, or benefit derived from using an additional unit of a variable factor of production, holding all other inputs constant.

Factors Of Production

The resources used to produce goods and services, traditionally categorized into land, labor, capital, and entrepreneurship.