Which of the following is correct?
A)Both purely competitive and monopolistic firms are "price takers."
B)Both purely competitive and monopolistic firms are "price makers."
C)A purely competitive firm is a "price taker," while a monopolist is a "price maker."
D)A purely competitive firm is a "price maker," while a monopolist is a "price taker."

Question

Quizplus · Accepted Answer

In a purely competitive market, firms are price takers because they have no control over the market price; they must accept the prevailing market price. A monopolist, on the other hand, is a price maker because it has significant control over the quantity of goods available in the market and can influence the price.

Which of the Following Is Correct