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

Question

Quizplus · Accepted Answer

A representative consumer is assumed to act competitively when he or she is a price-taker, meaning that he or she cannot influence the market price and must accept it as given. This assumption is a foundational concept in neoclassical economics.

The Representative Consumer Acts Competitively