Price is constant or "given" to the individual business selling in a perfectly competitive market because:
A)the business's demand curve is downward-sloping
B)of product differentiation reinforced by extensive advertising
C)each seller is a price-taker
D)there are no good substitutes for its product
E)of the significance of barriers to entry

Question

Quizplus · Accepted Answer

In a perfectly competitive market, there are many small firms selling homogeneous products. As a result, no single firm has enough market power to influence the price, and the firms must accept the prevailing market price as given. Therefore, each seller is a price-taker, meaning they have no control over the price and must take the market price set by the industry. Therefore, the price remains constant or "given" to the individual business selling in a perfectly competitive market.

Price Is Constant or "Given" to the Individual Business Selling