Which of the following statements best reflects a price-taking firm?

Question

Quizplus · Accepted Answer

All of the statements accurately describe characteristics of a price-taking firm. Price-taking firms operate in perfectly competitive markets where the market price is determined by supply and demand, and individual firms have no influence over the price. They must accept the market price as given, meaning if they charge more, they sell nothing (A), there's no incentive to charge less because they can sell all their output at the market price (B), and they can indeed sell as much as they want at the market price without affecting it (C).

Which of the Following Statements Best Reflects a Price-Taking Firm