The price a perfectly competitive firm receives for its output
A)is determined by the interaction of the firm and all of the consumers who buy from the firm.
B)is determined by the interaction of all sellers and all buyers in the firm's market.
C)will not change in response to changes in market demand and supply because the firm is a price taker.
D)will be lowered by the firm in order to sell more output.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the price is determined by the interaction of all sellers and buyers in the market, not by individual firms, as they are price takers.

The Price a Perfectly Competitive Firm Receives for Its Output