Answer:
The correct answer is letter "A": Mary Beth grows cotton. She finds that she can always sell her entire crop at the market price. However, if she asks a price that is even slightly higher she cannot sell any of her cotton.
Step-by-step explanation:
Perfect Competition is a market where competition is at the highest degree possible. Perfect competitive markets have the following characteristics:
- All companies sell the same goods or services.
- All companies are price takers.
- All firms have relatively small market shares.
- Buyers have full product and price information.
- The industry is characterized by low or no barriers to entry and exit of the industry.
Thus, in Mary Beth's case, she cannot ask for a different price than the one of the market because in a perfectly competitive market it is controlled by supply and demand. Companies cannot set the price.