Question

In the absence of any government regulation on price, if a firm has no power to set price onits own, one can safely conclude

A) the demand curve for the firm's product is horizontal.
B) there are many firms in the industry.
C) the market is in long-run equilibrium.
D) the firms in this industry are not profitable.

Answer 1

B) there are many firms in the industry.

Step-by-step explanation:

Firms that have no power to set price on its own are known as price takers.

An example of firms that are price takers are perfect competition.

In a perfect competition, there are many buyers and sellers of homogenous goods. Prices are set by the forces of demand and supply.

Because there are many sellers of homogenous goods, sellers cannot influence the price of their product. If they increase the price of their product, the quantity demanded would fall to zero.

I hope my answer helps you.