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Assumptions about Perfectly Competitive Markets

In perfect co...

Question

In perfect competition the seller is a price maker.

A

True

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B

False

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Solution

The correct option is B False
False.
Perfect competition is a type of market where there are large number of buyers and sellers who deals in homogeneous product due to which no individual unit is able to influence the price of the product and the firms have to quote the price that prevails in the market. Therefore, the seller is a price taker.

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Similar questions

Under perfect competition, the seller is a price taker. Under monopoly, he is the price maker. Explain.

Q. How is a seller under perfect competition a price taker and not a price maker? What is the relevance of the characteristic that there are 'large number of sellers' in this context?

Q. Under perfect competition, single seller can influence the price.

Q. Give reasons or explain:

1. Single price prevails in perfect competition.

2. Price discrimination is possible under monopoly.

3. Selling cost is incurred by a firm in Monopolistic competition.

4. A monopolist can control the supply of goods.

5. Sellers and the buyers are price takers in perfect competition.

Q. Fill in the blanks with appropriate alternatives given in the brackets:

1. Under perfect competition commodities are ________________ in nature. (homogeneous/ classified/ heterogeneous/ supplementary)

2. _____________ appears in a monopoly market. (product differentiation/ price discrimination/ individual differentiation/ packing differentiation)

3. The price at which demand and supply equate to each other is called _______ price. (general/ equilibrium/ short-run/ reserve)

4. In ________ market, seller creates products differentiation. (competition/ perfect/ pure/ monopolistic competition)

5. Monopolist means __________ competitive. (single seller/ several seller/ single buyer/ several buyer)

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