A firm in a perfectly competitive market has no control over price because
A) the government imposes price ceilings on the products produced in perfectly competitive industries.
B) there is free entry and exit from the industry.
C) every firm's product is a perfect substitute for every other firm's product.
D) the market demand for products produced in perfectly competitive industries is perfectly elastic.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, each firm's product is a perfect substitute for every other firm's product, meaning that no single firm can influence the market price.

A Firm in a Perfectly Competitive Market Has No Control