A price-taking firm: A) cannot influence the price of the product it sells B) talks to rival firms to determine the best price for all of them to charge C) sets the product's price to whatever level the owner decides upon D) asks the government to set the price of its product

Marketing Jan 14, 2021

A price-taking firm:

A) cannot influence the price of the product it sells

B) talks to rival firms to determine the best price for all of them to charge

C) sets the product's price to whatever level the owner decides upon

D) asks the government to set the price of its product

Expert Solution

The correct answer is: A) cannot influence the price of the product it sells.

A price taking firm is a perfectly competitive firm, where market price is determined by the forces of supply and demand. This means that an individual firm can not determine the market price for its product. This is because there are many firms dealing with identical products and both buyers and sellers have perfect knowledge about the market.

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