Which of the following statements best reflects a price-takingfirm? a. if the fi

Question

Which of the following statements best reflects a price-takingfirm? a. if the firm were to charge more than the going price, itwould sell none of its goods. b. The firm has an incentive to charge less than the marketprice to earn higher revenue. c.The firm can sell only a limited amount of output at themarket price before the market price will fall. d. Price-taking firms maximize profits by charging a priceabove marginal cost. Which of the following statements best reflects a price-takingfirm? a. if the firm were to charge more than the going price, itwould sell none of its goods. b. The firm has an incentive to charge less than the marketprice to earn higher revenue. c.The firm can sell only a limited amount of output at themarket price before the market price will fall. d. Price-taking firms maximize profits by charging a priceabove marginal cost.

Explanation / Answer

Which of the following statements best reflects a price-takingfirm? a. if the firm were to charge more than thegoing price, it would sell none of its goods.- price takers cannotaffect the price in any kind of way, charge more would not workbecause everyone else would sell at the equilibriumprice b. The firm has an incentive to charge less than the marketprice to earn higher revenue- not going c.The firm can sell only a limited amount of output at themarket price before the market price will fall- this ischaracteristic of monopoly/duopoloy/oligopoly d. Price-taking firms maximize profits by charging a priceabove marginal cost- MR=MC is the only way to maximize profit

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