Question

When firms are said to be price takers, it implies that if a firm raises its price: a. buyers will go elsewhere. b. buyers will pay the higher price in the short run. c. competitors will also raise their prices.

Answer 1

The correct answer is a. buyers will go elsewhere.

Step-by-step explanation:

This situation occurs when there is competition, that is, other businesses that offer the same or similar products as those of a particular company. In this scenario, the potential buyer will notice the difference according to their previous experiences and will find a way to acquire products from another brand that offer the same satisfaction as the product that rose in price. You must be very cautious with this practice, since it can end up damaging the operation, and in the worst case, leading to bankruptcy.