In pure competition:

Question

Quizplus · Accepted Answer

Option A is true because in pure competition, since the firm is a price-taker, they cannot influence the price, and thus the optimal point of production is where the marginal cost equals the price which is equal to marginal revenue. Option B is also true because in pure competition, the market consists of numerous buyers and sellers, and since every producer sells an identical product, the firm's demand curve is horizontal because any increase in the price will lead to the loss of all customers. Finally, option C is correct as well because in pure competition, the firm is a price-taker and has no control over the market price.

In Pure Competition