A(n) _____ perceives the demand for its own output as horizontal at the market price, so it can produce as much or as little as it wants without affecting that price.

Question

Quizplus · Accepted Answer

A perfect competitor operates in a market where there are many buyers and many sellers, and they all produce and sell identical products. The seller in a perfect competition market is a price taker, which means they have no control over the price and must accept the market price as it is. Hence, a perfectly competitive firm perceives the demand for its output as horizontal at the market price, so it can produce as much or as little as it wants without affecting that price.

A(n) _____ Perceives the Demand for Its Own Output as Horizontal