The assumptions of perfect competition imply that:
A) individuals in the market accept the market price as given.
B) individuals can influence the market price.
C) the price will be a fair price.
D) the price will be low.

Question

Quizplus · Accepted Answer

Perfect competition assumes that no individual or firm has the power to influence the market price, so individuals must accept the market price as given. Therefore, choice A is correct. Choices B, C, and D are all incorrect because they suggest that individuals or the market as a whole may have power or influence over the price, which is contrary to the assumptions of perfect competition.

The Assumptions of Perfect Competition Imply That