Question

Under perfect competition, a firm is a price taker because:________.a. setting a price higher than the going price results in zero salesb. each firm's product is perceived as differentc. each firm has a significant market shared. all of the above

Answer 1

Answer:

a. setting a price higher than the going price results in zero sales

Explanation:

Perfect competition markets are theoretical since there is not perfectly competitive market in the world, but some markets, specially commodities, work in similar ways. All the markets that work similarly to perfect competition markets have many sellers and buyers, and that prevents any individual seller or buyer from having to much market power, so all of them must be price takers if they want to sell their goods.