A firm is typically defined as a business entity that produces goods or services. Option A is not entirely accurate as a firm can consist of only one person, such as a sole proprietorship. Option C is not necessarily true as a firm can be privately owned. Option D is not a characteristic that applies to all firms as some may have market power and be price makers.

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A Firm ________

Question 34

Multiple Choice

A firm ________.

A) includes many people and cannot consist of only one person.
B) is a business entity that produces goods or services
C) is a business entity that is owned by the government
D) is always a price taker

Correct Answer: