3264
Question
Under perfect competition, the price is determined by the industry. At this price a firm can sell any quantity. The AR curve is perfectly elastic. Under monopoly, firms can sell more only at a lower price. So, AR is negatively sloped.
Which form of market is known as a price taker?
[1 mark]
Under perfect competition, the price is determined by the industry. At this price a firm can sell any quantity. The AR curve is perfectly elastic. Under monopoly, firms can sell more only at a lower price. So, AR is negatively sloped.
Which form of market is known as a price taker?
[1 mark]
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Solution
The correct option is A Perfect competition
Since the producers in the perfect competition take the prices from the market, they are termed as price takers
Since the producers in the perfect competition take the prices from the market, they are termed as price takers
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