If a firm is a price taker, then it can
A) sell below the market price and increase its economic profit
B) sell all it wants at the market price
C) sell above the market price and increase its economic profit
D) supply the entire market
E) choose its own price

Question

Quizplus · Accepted Answer

A firm that is a price taker can sell any quantity of its product at the prevailing market price but cannot influence the price itself. This is characteristic of perfect competition, where many firms sell identical products.

If a Firm Is a Price Taker, Then It Can