A single firm in a perfectly competitive market is a price t

A single firm in a perfectly competitive market is a price taker? True or False. Explain with examples.

Solution

A single firm in the perfectly competitive market is price taker because price is determined by industry by the intersection of demand and supply of the goods and services.

For example if there are large number firms and consumer, so an individual firm cannot affect the price because it supply only very insignificant quantity.

Hence this statement is true.