A firm in a market with perfect competition has the ability to set _________ but not _______.
A)marginal cost; price
B)output; marginal cost
C)output; price
D)marginal cost; marginal revenue

Question

Quizplus · Accepted Answer

In a perfectly competitive market, no individual firm has the power to set the price. The price is determined solely by the market forces of supply and demand. However, a firm can choose how much output to produce, but this decision is based on the market price and the firm's marginal cost. So the correct option is C - a firm in a market with perfect competition has the ability to set output but not price.

A Firm in a Market with Perfect Competition Has the Ability