If a Firm Happened to Be the Only Seller of a Particular

question 76

Multiple Choice

If a firm happened to be the only seller of a particular product,it might behave as a price taker as long as

• A) buyers have full information about the firm's price.
• B) the transaction costs of doing business with this firm are low.
• C) there are many buyers.
• D) there is free entry and exit.

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Definitions:

Bilateral Contract

A legal agreement in which both parties make promises to perform certain actions or obligations.

Unilateral Contract

An agreement where one party makes a promise in exchange for an act by another party, becoming binding once the act is performed.

AIG

American International Group, Inc., a multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions.

Liquidated Debt

A debt for which the exact monetary value has been determined and acknowledged by all parties involved.