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 more about a price taker.

Have a Financial Question?

RELATED FAQS

  1. A brokerage customer has $10,000 in securities and a credit balance of $4,000 ... ...

    The correct answer is d The market value of the person's equity is equal to the market value of the securities plus the credit ...
  2. What parameters are required for a market to exhibit perfect competition?

    Learn what parameters are required for a market to exhibit perfect competition and how perfect competition is more of a theory ...
  3. What is the difference between a monopolistic market and perfect competition?

    Learn about monopolistic and perfectly competitive markets, what they are, and the main differences between perfect competition ...
  4. Compute the offering price for a mutual fund with NAV of $1,200,000,000, an 8% front-end ...

    A. $1,304.35B. $1,200.00C. $1,196.35D. $1,296.00 Correct answer: A"B" is the bid price, not the offering price; "C" ...
  5. How does price elasticity change in relation to supply and demand?

    Learn about how variations in price elasticity affect the supply and demand curves and what factors cause differences in ...
RELATED TERMS
  1. Perfect Competition

    A market structure in which the following five criteria are met: ...
  2. Series 27

    A securities license entitling the holder to become a chief financial ...
  3. Elastic

    An economic term referring to the change in behavior that buyers ...
  4. Monopolistic Competition

    Characterizes an industry in which many firms market products ...
  5. Assessable Security

    A type of stock that companies issued to investors at a discount ...
  6. Pricing Power

    An economic term referring to the effect that a change in a firm's ...
Trading Center