In perfectly competitive industries firms are termed as ___________.

price takers

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Price creators

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Price makers

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Price setters.

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Solution

The correct option is A price takers
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 a single price that prevails in the market. Therefore, the firms are price taker under perfect competition.

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Similar questions

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

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