Under perfect competition, a firm is a price taker because:
A. setting a price higher than the going price results in profits.
B. each firm's product is perceived as different.
C. each firm has a significant market share.
D. setting a price higher than the going price results in zero sales.
Answer: D
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Transaction costs are likely to be ________ when property rights are ________ clearly defined
A) lower ; less B) higher; more C) lower; more D) Trick question: there is no causal relationship between transaction costs and property rights.
Both The Wealth of Nations and the Declaration of Independence share the point of view that
a. every person is entitled to life, liberty, and the pursuit of happiness. b. individuals are best left to their own devices without the government guiding their actions. c. the government plays a central role in organizing a market economy. d. because of human nature a strong legal system is necessary for a market system to survive.