As a farmer, Gary Forsythe is familiar with the economics of perfect competition.How is the price at which he sells his corn determined?
A) The price is determined by Gary because he has the product that many people want.
B) The price is determined by combining the actions of all buyers and all sellers together.
C) The price he will receive is primarily determined by the buyer at the local grain bin.
D) The government sets the price of the corn to level the playing field for everyone.
E) The price will be approximately 25 percent higher than what other farmers are selling the same corn for, because Gary is an astute businessperson.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the price is determined by the forces of supply and demand, and the actions of all buyers and sellers interacting in the market. Gary's individual actions as a seller will not have a significant impact on the price. Therefore, the price he receives for his corn will be determined by the market as a whole.

As a Farmer, Gary Forsythe Is Familiar with the Economics