Firms in perfectly competitive markets take the ______ as given when deciding how much to sell.
A) Market quantity
B) Lowest prices
C) Market prices
D) Input prices

Question

Quizplus · Accepted Answer

In perfectly competitive markets, firms are price takers and cannot influence the market price. Therefore, they take the market price as a given and base their production decisions on this price. They cannot charge a higher price than the market price, as consumers will simply buy from a competitor who charges a lower price. Thus, option C) Market prices is the correct answer.

Firms in Perfectly Competitive Markets Take the ______ as Given