A firm characterized as a price-taker:
A) has control over the price it pays, or receives, in the market.
B) sets the price for the market.
C) has no control over the price it pays, or receives, in the market.
D) is not a characteristic of a competitive market.
E) takes the price that is determined from the lowest price consumers are willing to pay for an item.

Question

Quizplus · Accepted Answer

A price-taker has no control over the price it pays, or receives, in the market. In other words, it must accept the market price as it is and cannot influence it. This is a characteristic of a competitive market, where there are many buyers and sellers and no single entity can dictate the price.

A Firm Characterized as a Price-Taker