A Perfectly Competitive Firm Is a Price Taker

question 183

Multiple Choice

A perfectly competitive firm is a price taker.Therefore, it faces a

• A)perfectly elastic supply curve for its output
• B)perfectly elastic demand curve for its output
• C)perfectly inelastic supply curve for its output
• D)perfectly inelastic demand curve for its output
• E)unit-elastic demand curve for its output

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Definitions:

Interest Rates

The percentage charged on the total amount borrowed or earned, reflecting the cost of borrowing or the yield on investments.

Commodities

Raw materials or primary agricultural products that can be bought and sold.

Futures Exchange

A Futures Exchange is a central marketplace where people can trade standardized futures contracts; that is, contracts to buy or sell assets at a future date at an agreed-upon price.

Interest Rate Swap

A financial derivative contract where two parties exchange interest rate payments, typically one with a fixed rate and the other with a floating rate.