Suppose a single egg farmer alters the number of eggs she produces but the change in egg output does not have any effect on the market price. This example describes which of the following characteristics of perfect competition?

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the presence of a large number of small firms means that the actions of any single firm, such as altering its output, will not affect the market price because its contribution to the total market supply is insignificant. This characteristic allows for the scenario described.

Suppose a Single Egg Farmer Alters the Number of Eggs