CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

The least likely reason why a firm in perfect competition is a price taker is because ______
A. buyers are well-informed about the prices of other firms.
B. it can set its products' price at or above the market price.
C. it produces a very small portion of the total output of a particular good.
Explanation: A price taker is a firm that cannot influence the market price and consequently sets its own price at the marketplace price, not above it. The key reason why a firm in perfect competition is a price taker is because buyers are well-informed about the prices of other firms and it produces a tiny portion of the total market output.

User Contributed Comments 2

User Comment
dbalakos the LEAST, the easiest question I have got wrong, time for a break
nmech1984 LEAST................ cfa is playing games...
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