Q349
In a perfectly competitive market
A.
Firm is the price giver and industry the price taker
B.
Firm is the price taker and industry the price giver
AnswerC.
Both are price takers
D.
None of the above
Answer: Option B
Solution
Answer: Option B
Solution:
In a perfectly competitive market firm is the price taker and industry the price giver. A perfectly competitive firm would be characterized as a "price taker" due to its inability to influence market price. In a perfectly competitive market, the price of the products are fixed since each firm is producing just enough to stay in business.