Of the following characteristics of competitive markets, which are necessary for firms to be price takers?
(i) many sellers
(ii) goods offered for sale are largely the same
(iii) firms can freely enter or exit the market

Question

Quizplus · Accepted Answer

For firms to be price takers, there must be many sellers (i) and the goods offered must be largely the same (ii), ensuring no single firm can influence the market price. Free entry and exit (iii) is not necessary for being a price taker but is a characteristic of competitive markets.

Of the Following Characteristics of Competitive Markets, Which Are Necessary