In pure competition, price is determined where the industry
A) demand and supply curves intersect.
B) total cost is less than total revenue.
C) demand intersects the individual firm's marginal cost curve.
D) average total cost equals total variable cost.

Question

Quizplus · Accepted Answer

In pure competition, the price is determined by the intersection of industry demand and supply curves. This is because in perfect competition, firms are price takers and have no control over the price. Therefore, the market price is determined by the forces of demand and supply.

In Pure Competition, Price Is Determined Where the Industry