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Why Is a Perfectly Competitive Firm Said to Be a Price

Question 2

Multiple Choice

Why is a perfectly competitive firm said to be a price taker?


A) It produces such a good which is not produced by any other firm in the market.
B) It faces the downward sloping market demand curve.
C) The firm's individual production is insignificant relative to production in the industry.
D) There does not exist any barrier to the entry of new firms in the industry.
E) The firm's marginal-revenue curve is downward sloping.

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