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1. For each of the following, is the business a price-taking producer? Explain your answers. a. A cappuccino café in a univer
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Answer #1

A- It is a price taking producer since there are dozens of producers and they are producing homogenous goods. So, they can't charge a different price. Therefore, they will accept a market price.

B- It is not a price taking producer. Since pepsi-cola have some market power and therefore they have little control over the price.

C- It is a price taking producer since all of the sellers are selling homogenous good. Hence,they have to accept the market price.

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