In contrast to a monopoly firm, a perfectly competitive firm:
A) is a price taker.
B) faces a downward-sloping demand curve.
C) has only a moderate degree of monopoly power.
D) produces more than the efficient level of output.

Question

Quizplus · Accepted Answer

A perfectly competitive firm is a price taker, meaning that it has no market power to affect the market price of its product. It must accept the existing market price as given and adjust its output accordingly.

In Contrast to a Monopoly Firm, a Perfectly Competitive Firm