A Company Is a Price-Taker When ________

question 144

Multiple Choice

A company is a price-taker when ________.

• A) it operates in a highly competitive market
• B) its product is unique
• C) it has considerable flexibility in setting prices of its products
• D) it has very high fixed costs

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Definitions:

Positive Profits

Financial gains realized when the total revenues of a business exceed its total costs.

Pure Monopolist

A single seller in a market that produces a unique product without close substitutes, having significant control over the market price.

Profit-Maximizing Output

The level of production at which a company achieves the highest possible profit, where marginal cost equals marginal revenue.

Short-Run Equilibrium

The condition where supply and demand are balanced at a particular level of output and price over a short period.