ECN 104 Chapter Notes - Chapter 4: Shortage, Economic Equilibrium, Demand Curve

Why are buyers and sellers price takers in a perfectly competitive market?

A competitive market is one in which:

a. is only one seller, but many buyers. 

b. are many sellers, and each has the ability to set the price of his product. 

c. are many sellers and compete with one another in such a way that some sellers are always being forced out of the market. 

d. are so many buyers and so many sellers that each has a negligible impact on the price of the product. 

Both buyers and sellers are price takers in a perfectly competitive market because