Each firm in a perfectly competitive industry is

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, each firm is a price taker, meaning they have no control over the market price and must accept the equilibrium price determined by supply and demand. This eliminates the possibility of being a price maker. The products produced by each firm are identical, which eliminates the possibility of producing a unique product. Finally, since there are many firms in a perfectly competitive industry, each firm is relatively small in size, which eliminates the possibility of being relatively large. Therefore, the correct answer is C.

Each Firm in a Perfectly Competitive Industry Is