Home › MCQs › Agriculture Economics › Question #11870
Back to Questions
Agriculture Economics QUESTION #11870
Question 1
Under perfect competition, an individual firm is a 'price taker' because:
  • It sets the market price for all competitors
  • It is too small relative to the market to influence price✔️
  • Government regulates the price it charges
  • It faces a downward-sloping demand curve
Correct Answer Explanation
In perfect competition, each firm is small relative to the total market, so it must accept the prevailing market price.