Price taker markets differ from price searcher markets because in a price taker market ...

By Investopedia Staff AAA
Q:

Price taker markets differ from price searcher markets because in a price taker market:
a) Firms produce identical products.
b) Output from one firm has very little effect on the market price.
c) Sellers face a perfectly elastic (horizontal) demand curve.
d) All of these are characteristics of a price takers market.
e) None of these are characteristics of a price takers market.

A:

The correct answer is d.
A price taker is a firm that can alter its rate of production and sales without significantly affecting the market price of the product because their output is small compared to the overall market.
What is a Price Taker? - learn what a price taker is and simplify the definition between investing and trading.

Have a Financial Question?

RELATED FAQS

  1. Who benefits the most from prepaid expenses?

    Learn who benefits most when expenses are prepaid. Individuals and businesses often make payments, such as rent or insurance, ...
  2. If I am looking to get an Investment Banking job. What education do employers prefer? ...

    If you are looking specifically for an investment banking position, an MBA may be marginally preferable over the CFA. The ...
  3. Can I still pass the CFA Level I if I do poorly in the ethics section?

    You may still pass the Chartered Financial Analysis (CFA) Level I even if you fare poorly in the ethics section, but don't ...
  4. Which of the following terms are associated with the purchase/redemption of open-end ...

    The correct answer is b. Forward pricing is the SEC Rule that requires all transactions in open-end investment company shares ...
RELATED TERMS
  1. Personal Financial Advisor

    Professionals who help individuals manage their finances by providing ...
  2. CFA Institute

    Formerly known as the Association for Investment Management and ...
  3. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly ...
  4. Security Analyst

    A financial professional who studies various industries and companies, ...

You May Also Like

Related Articles
  1. No results found.
Trading Center