A(n) ____ is a price taker.
A)monopolistic firm.
B)oligopoly firm.
C)perfectly competitive firm.
D)monopolistically competitive firm.
E)duopoly firm.

Question

Quizplus · Accepted Answer

A perfectly competitive firm is a price taker, meaning that it has no control over the price of the product it sells and must accept the market-determined price. This is because there are many firms producing an identical product, and buyers have perfect information about prices and products. Therefore, any firm that tries to charge a higher price will lose customers to competitors who offer a lower price. In contrast, monopolistic, monopolistically competitive, oligopoly, and duopoly firms can exercise some control over prices, either by setting prices themselves or through collusion with competitors.

A(n) ____ Is a Price Taker