The correct answer is: A. firm is a price-taker.
A price-taker is a firm that has no control over the price of its product. The price of the product is determined by the market, and the firm must accept the market price in order to sell its product.
A firm’s demand curve is the relationship between the price of its product and the quantity of the product that it can sell. If the individual firm’s demand curve is coincident with the market demand curve, then the firm is a price-taker. This is because the firm cannot charge a price above the market price, as no customers would buy its product. The firm also cannot charge a price below the market price, as it would lose money.
The other options are incorrect. A monopolist is a firm that is the only seller of a good or service. A monopolist has a great deal of control over the price of its product, and it can set the price at any level it wants. A firm can set any price it wants without limitation if it is the only seller of a good or service. However, if there are other firms selling the same good or service, then the firm will have to accept the market price. Marginal revenue is the additional revenue that a firm earns from selling one more unit of its product. Average revenue is the total revenue that a firm earns divided by the number of units of the product that it sells. Marginal revenue is equal to average revenue when the firm is a price-taker.