A single firm in a perfectly competitive market is a _________.
Question
A single firm in a perfectly competitive market is a _________.
Solution
A single firm in a perfectly competitive market is a "price taker".
Here's why:
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In a perfectly competitive market, there are many firms selling identical products. This means that no single firm can influence the market price.
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Each firm must accept the price determined by the market demand and supply. They cannot set their own price.
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Therefore, each firm in a perfectly competitive market is a "price taker" because they take the market price as given and decide their production levels accordingly.
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