When a firm is referred to as a "price taker,"
A)the firm initially takes price as given and tries to influence it through advertising.
B)the firm can alter its rate of production and sales without affecting the market price of the product.
C)the firm will be willing to sell an infinite quantity at the market price.
D)the demand curve that the firm faces is perfectly inelastic.
E)the firm can alter the market price as it changes its rate of production.

Question

Quizplus · Accepted Answer

A "price taker" firm operates in a perfectly competitive market where it cannot influence the market price and must accept the prevailing market price, regardless of its level of production or sales.

When a Firm Is Referred to as a "Price Taker