Asked by
Amanda Marroquin
on Dec 11, 2024
Verified
Within the framework of the price-taker model, a price taker will always produce a quantity of output that
A) minimizes the per-unit cost of production.
B) is expected to provide the largest possible total revenue.
C) maximizes total revenue minus total cost.
D) brings average total cost and price into equality.
Price-Taker Model
A market scenario where individual firms or consumers accept the prevailing market price because they are unable to influence it.
Per-Unit Cost
The average cost associated with producing one unit of a product, calculated by dividing the total cost of production by the number of units produced.
Total Revenue
The total amount of money a company receives from selling its goods or services without deducting any costs.
- Understand the impact of market price on the determination of output levels by firms in a competitive price-taker environment.
- Comprehend how in competitive markets, the feature of unrestricted entry and exit drives the price down to the lowest average total cost.
Verified Answer
ZM
Learning Objectives
- Understand the impact of market price on the determination of output levels by firms in a competitive price-taker environment.
- Comprehend how in competitive markets, the feature of unrestricted entry and exit drives the price down to the lowest average total cost.