A firm in perfect competition is referred to as a price-taker because:
A) it could not alter the market price by adjusting its output.
B) competition is carried on primarily through non-price competition.
C) it is uncertain what the price for its product should be.
D) being a small firm, it has to accept the price dictated by the larger firms.

Question

Quizplus · Accepted Answer

In perfect competition, each firm is too small to influence the market price and must accept the prevailing market price.

A Firm in Perfect Competition Is Referred to as a Price-Taker