Individual firms in perfectly competitive industries are price takers because: a) buyers set prices b) the government sets all prices c) firms decide together on the best price to charge d) each individual firm is too small to affect the market price

Marketing Jan 14, 2021

Individual firms in perfectly competitive industries are price takers because:

a) buyers set prices

b) the government sets all prices

c) firms decide together on the best price to charge

d) each individual firm is too small to affect the market price

Expert Solution

Individual firms in perfectly competitive industries are price takers because:

d) each individual firm is too small to affect the market price

The market power in perfectly competitive markets is equally distributed amongst the numerous players in the market and one single buyer or a single seller does not have the ability to influence the prices at which the goods are exchanged in the market.

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