Question

Why is a firm in perfect competition a price​ taker? A firm in perfect competition is a price taker because​ _______. 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 B. it is easier to take the price as given rather than calculate the​ profit-maximizing price C. charging a lower price than the market price is considered uncompetitive D. the market price is always the​ profit-maximizing price

Answer 1

Answer:

Correct answer for why a firm in perfect competition is a price taker is option  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

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.

Answer 2

Answer: B it's easier to take the price as given rather than calculate the profit maximizing price

Explanation:

Because if a firm in perfect competition attempt to charge a tiny amount above the market price sales will be hard and sometimes almost impossible