CA Foundation Exam > CA Foundation Questions > Price taker firms _________a)Do not advertise...
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Price taker firms _________
- a)Do not advertise their product because it misleads the customers
- b)Advertise their products to boost the level of demand
- c)Do not advertise but give gifts along with the sold items to attract customers
- d)Do not advertise because they can sell as much as they wish at the prevailing price
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Price taker firms _________a)Do not advertise their product because it...
Price taker firms do not advertise because they can sell as much as they wish at the prevailing price.
Price taker firms are firms that operate in perfectly competitive markets. In such markets, there are numerous buyers and sellers, and no single firm has the power to influence the market price. As a result, price taker firms have to accept the market price as given and adjust their output accordingly. This means that they have no control over the price at which they sell their products.
Reasons why price taker firms do not advertise:
1. No control over price: Price taker firms cannot set the price for their products. They have to accept the prevailing market price, which is determined by the overall supply and demand in the market. Since advertising typically involves promoting products at a specific price, it would be futile for price taker firms to advertise because they cannot guarantee that the advertised price will align with the market price.
2. Perfect competition: Perfectly competitive markets have many firms selling homogeneous products. In such markets, consumers are price sensitive and are likely to choose the product with the lowest price. Price taker firms, therefore, compete solely on price. Advertising would not provide any competitive advantage as it would not influence the price or product differentiation.
3. Unnecessary cost: Advertising can be expensive, especially for firms with limited resources. Price taker firms, which operate on thin profit margins, may not have the financial capacity to invest in advertising. Since they can sell as much as they wish at the prevailing price, there is no need for them to incur additional costs on advertising.
4. Word-of-mouth and reputation: In perfectly competitive markets, reputation and word-of-mouth play a crucial role in attracting customers. If a price taker firm consistently offers high-quality products at competitive prices, it is likely to build a positive reputation among customers. This reputation can lead to customer loyalty and word-of-mouth referrals, which can drive sales without the need for advertising.
In conclusion, price taker firms do not advertise because they have no control over the price, operate in perfectly competitive markets, and can sell as much as they wish at the prevailing price. Advertising would not provide any competitive advantage and would be an unnecessary cost for these firms. They rely on reputation and word-of-mouth to attract customers in their quest to maximize sales and profits.
Price taker firms are firms that operate in perfectly competitive markets. In such markets, there are numerous buyers and sellers, and no single firm has the power to influence the market price. As a result, price taker firms have to accept the market price as given and adjust their output accordingly. This means that they have no control over the price at which they sell their products.
Reasons why price taker firms do not advertise:
1. No control over price: Price taker firms cannot set the price for their products. They have to accept the prevailing market price, which is determined by the overall supply and demand in the market. Since advertising typically involves promoting products at a specific price, it would be futile for price taker firms to advertise because they cannot guarantee that the advertised price will align with the market price.
2. Perfect competition: Perfectly competitive markets have many firms selling homogeneous products. In such markets, consumers are price sensitive and are likely to choose the product with the lowest price. Price taker firms, therefore, compete solely on price. Advertising would not provide any competitive advantage as it would not influence the price or product differentiation.
3. Unnecessary cost: Advertising can be expensive, especially for firms with limited resources. Price taker firms, which operate on thin profit margins, may not have the financial capacity to invest in advertising. Since they can sell as much as they wish at the prevailing price, there is no need for them to incur additional costs on advertising.
4. Word-of-mouth and reputation: In perfectly competitive markets, reputation and word-of-mouth play a crucial role in attracting customers. If a price taker firm consistently offers high-quality products at competitive prices, it is likely to build a positive reputation among customers. This reputation can lead to customer loyalty and word-of-mouth referrals, which can drive sales without the need for advertising.
In conclusion, price taker firms do not advertise because they have no control over the price, operate in perfectly competitive markets, and can sell as much as they wish at the prevailing price. Advertising would not provide any competitive advantage and would be an unnecessary cost for these firms. They rely on reputation and word-of-mouth to attract customers in their quest to maximize sales and profits.
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Price taker firms _________a)Do not advertise their product because it...
Price taker firms do not advertise because they can sell as much as they wish at the prevailing price.
Price taker firms are businesses that operate in a perfectly competitive market where they have no control over the price of their product. In other words, they have to accept the market price as given and cannot influence it through their actions. As a result, these firms do not advertise their products.
1. Nature of a price taker firm:
- Price taker firms are small players in the market and have no market power.
- They have a large number of competitors selling similar products.
- They have no control over the price and have to accept the prevailing market price.
- They are price takers, meaning they have to take the price determined by the market.
2. Selling as much as they wish at the prevailing price:
- Price taker firms can sell as much of their product as they wish at the prevailing market price.
- Since they have no control over the price, they do not need to advertise to attract customers.
- The demand for their product is determined by market conditions, and they can sell as much as the market demands at the given price.
3. Advertising is unnecessary for price taker firms:
- Price taker firms do not need to advertise their products because they do not influence the market price.
- Advertising is typically used to create brand awareness, differentiate products, and attract customers.
- Since price taker firms offer homogenous products and have no control over the price, advertising would not significantly impact their sales.
- Instead of investing in advertising, price taker firms focus on minimizing costs and maximizing efficiency to remain competitive in the market.
In conclusion, price taker firms do not advertise their products because they have no control over the price and can sell as much as they wish at the prevailing market price. They focus on optimizing their operations and minimizing costs to remain competitive in the market.
Explanation:
Price taker firms are businesses that operate in a perfectly competitive market where they have no control over the price of their product. In other words, they have to accept the market price as given and cannot influence it through their actions. As a result, these firms do not advertise their products.
1. Nature of a price taker firm:
- Price taker firms are small players in the market and have no market power.
- They have a large number of competitors selling similar products.
- They have no control over the price and have to accept the prevailing market price.
- They are price takers, meaning they have to take the price determined by the market.
2. Selling as much as they wish at the prevailing price:
- Price taker firms can sell as much of their product as they wish at the prevailing market price.
- Since they have no control over the price, they do not need to advertise to attract customers.
- The demand for their product is determined by market conditions, and they can sell as much as the market demands at the given price.
3. Advertising is unnecessary for price taker firms:
- Price taker firms do not need to advertise their products because they do not influence the market price.
- Advertising is typically used to create brand awareness, differentiate products, and attract customers.
- Since price taker firms offer homogenous products and have no control over the price, advertising would not significantly impact their sales.
- Instead of investing in advertising, price taker firms focus on minimizing costs and maximizing efficiency to remain competitive in the market.
In conclusion, price taker firms do not advertise their products because they have no control over the price and can sell as much as they wish at the prevailing market price. They focus on optimizing their operations and minimizing costs to remain competitive in the market.
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Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer?.
Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Price taker firms _________a)Do not advertise their product because it misleads the customersb)Advertise their products to boost the level of demandc)Do not advertise but give gifts along with the sold items to attract customersd)Do not advertise because they can sell as much as they wish at the prevailing priceCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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