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Question
Why an individual firm under perfect competition cannot influence the market price?
Solution
A firm under perfect competition cannot influence the price as its share in the total market supply is negligible.
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RELATED QUESTIONS
Match the following and select the correct option.
| Column I | Column II | ||
| (i) | Perfectly elastic demand | (A) | Oligopoly |
| (ii) | Less elastic demand | (B) | Monopolistic competition |
| (iii) | More elastic demand | (C) | Perfect competition |
| (iv) | Indeterminate demand | (D) | Monopoly |
Which of the following statements are true?
- Monopolistically competitive markets have high selling costs.
- Monopolistically competitive markets sell homogeneous goods.
- Any firm can start a business in a monopolistically competitive market.
Products sold by each firm in a perfectly competitive market are perfect substitutes of each other.
What are selling costs?
In which form of market is the seller a price taker? Justify your answer.
Identify the market form for the following:
Perfectly elastic demand.
Name the market in which there is a single buyer and many sellers.
What is meant by barriers to entry?
What is the effect on price when a perfectly competitive firm tries to sell more?
Name the market which has characteristics both of monopoly and perfect competition.
