Your Local Farmer Has Many Competitors and Exists in a Market

question 379

Multiple Choice

Your local farmer has many competitors and exists in a market structure known as perfect competition. This means that price is determined outside of the individual farmer's ability to charge a price higher than the going market for a bushel of wheat, hence the farmer is

• A) a price maker and can therefore charge different customers different prices.
• B) always able to price produce above the competition and earn a larger profit.
• C) never able to determine any prices he charges for anything, such as soybeans.
• D) a price taker and cannot affect the market price of wheat.

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Definitions:

Product Value

The importance or usefulness of a product to a consumer, often reflected in their willingness to pay for it.

Producing More X

Increasing the output or manufacture of a specific product or commodity, referred to as "X".

Society Gains

Refers to the overall benefits or improvements in welfare that accrue to a community or society from economic activities or policies.

Current Output

The total amount of goods or services produced by a firm or economy at a given time.