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A purely competitive firm is a price maker, but a monopolist is a price taker.

a. true
b. false

User Pancakes
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1 Answer

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Final answer:

A perfectly competitive firm is a price taker, while a monopolist is a price maker.

Step-by-step explanation:

A perfectly competitive firm is known as a price taker because the pressure of competing firms forces them to accept the prevailing equilibrium price in the market. In a perfectly competitive market, a firm has no market power and must simply accept the market price as given. On the other hand, a monopolist is a price maker because it has market power and can set its own price based on its assessment of consumer demand.

User Mkhurmi
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