When Firms Are Said to Be Price Takers, It Implies

question 204

Multiple Choice

When firms are said to be price takers, it implies that if a firm raises its price,

• A)buyers will go elsewhere.
• B)buyers will pay the higher price in the short run.
• C)competitors will also raise their prices.
• D)firms in the industry will exercise market power.

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Definitions:

Manhattan Island

An island located at the mouth of the Hudson River in New York City, known for being the city's economic and cultural center.

Automobile Factory

A manufacturing facility that specializes in producing automobiles, utilizing assembly lines for efficient mass production.

Unemployment

Occurs when people who are willing to work are unable to find jobs, representing a wasted potential in the economy.

Underemployment

describes a situation where workers are employed in capacities below their skill level or work fewer hours than they would prefer.