Answer:
Correct answer for why a firm in perfect competition is a price taker is option <u>A. it produces a tiny proportion of the total output of a particular good and buyers are well informed about the prices of other firms</u>
Explanation:
A price taker is a company that has no control to dictate prices for a good or service.
In the stock exchange market, a price taker is a trader who does not affect the price of the stock if he or she buys or sells shares.
A price taker is a business that sells such available products that it must accept the prevailing market price for its products. For example, a farmer produces wheat, which is a readily available. The farmer can only sell at the prevailing market price or lose.
All economic participants are considered to be price-takers in a market of perfect competition or one in which all companies sell an identical product, there are no barriers to entry or exit, every company has a relatively small market share, and all buyers have full information of the market.
