The representative consumer acts competitively
A)when he or she is a price-maker.
B)if the consumer is large relative to the size of the market.
C)when he or she has to make decisions regarding work and leisure.
D)when he or she is a price-taker.
E)when he or she can haggle for a lower price.

Question

Quizplus · Accepted Answer

A price-taker is a consumer who acts competitively by accepting the market price as given and has no ability to influence the price. This is the standard assumption in most economic models of consumer behavior. A price-maker, on the other hand, has some market power and can influence the market price. Choices A, B, and E are not related to the concept of acting competitively in economics. Choice C refers to the trade-off between work and leisure and is not directly related to consumer behavior.

The Representative Consumer Acts Competitively