In a competitive market, ________ is the price taker.

firm

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industry

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consumer

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trade association

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Solution

The correct option is A firm
A perfectly competitive market is characterised with a large number of buyers and sellers and product being traded is homogeneous in nature. A single seller or buyer can't affect the market equilibrium in this market structure. Thus, a firm in a competitive market is the price taker.

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Explain how price is determined in a perfectly competitive market with a fixed number of firms.

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