A perfectly competitive firm has to charge the same price as every other firm in the market.Therefore, the firm
A)faces a perfectly inelastic demand curve.
B)is not able to make a profit in the short run.
C)is a price taker.
D)faces a perfectly elastic supply curve.

Question

Quizplus · Accepted Answer

A perfectly competitive firm is a price taker, meaning it has no power to influence the market price and must accept the prevailing price as given. Therefore, choice C is the correct answer. Choices A, B, and D are incorrect because a perfectly inelastic demand curve would mean that consumers do not respond to changes in price, a firm can make a profit in the short run if the market price exceeds its average variable cost, and a perfectly elastic supply curve would mean that the firm can sell as much output as it wants at the prevailing market price, which is not the case in a perfectly competitive market.

A Perfectly Competitive Firm Has to Charge the Same Price