Because a perfectly competitive firm supplies a negligible share of the market output, it has to take or accept the price that is determined in the market.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, individual firms are price takers because they produce a negligible portion of the total market supply, and thus, they must accept the market price determined by the aggregate supply and demand.

Because a Perfectly Competitive Firm Supplies a Negligible Share of the Market