A Farmer Has Many Competitors and Exists in a Market

question 134

Multiple Choice

A 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:

Percentage Change

The proportional difference between two values, typically expressed as a percentage.

Grams

A metric unit of mass equal to one thousandth of a kilogram.

Suggested Retail Price

The retail price recommended by the manufacturer for the sale of a product to consumers.

Unit Retail Price

The price at which a single unit of a product is sold to consumers in the retail market.