Which of the Following Statements Best Reflects a Price-Taking Firm

question 198

Multiple Choice

Which of the following statements best reflects a price-taking firm?

• A)If the firm were to charge more than the going price, it would sell none of its goods.
• B)The firm has an incentive to charge less than the market price to earn higher revenue.
• C)The firm can sell only a limited amount of output at the market price before the market price will fall.
• D)Price-taking firms maximize profits by charging a price above marginal cost.

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Definitions:

Property Plant

Assets of a tangible nature, like buildings and machinery, used in operations and expected to be used over several years.

Equipment Section

Part of a company's balance sheet or financial statements that lists the tangible assets used in operations, like machinery, along with their net book values.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position, showing assets, liabilities, and equity as of a specific date.

Current Liabilities

Short-term financial obligations that are due within one year or within the current business cycle, whichever is longer.