A firm that is a price taker:
A) can increase marginal revenue by increasing its price level
B) can sell as much output as it wants to at the market determined price
C) can increase its total revenue by increasing its price
D) could force other firms to lower their prices by dropping its own price level

Question

Quizplus · Accepted Answer

A price taker is a firm that must accept the market price for its product and cannot influence it. Therefore, it can sell as much output as it wants at the market-determined price but cannot increase its price to increase revenue.

A Firm That Is a Price Taker