![]() ![]() The main output decision for a price-taking firm is the decision of how many goods or services to sell. ![]() So long as a perfectly competitive firm is willing to sell at the market price, the firm can sell any number of units it wishes to sell. This price is called the market price-also called the equilibrium price or the market-clearing price. The firm must accept whatever price the interaction of supply and demand sets in the market. It has no market power and no ability to set prices. Some important facts about perfectly competitive firms are: How Perfectly Competitive Firms Make Output DecisionsĪ Perfectly Competitive Firm’s Perceived Demand CurveĪ Perfectly Competitive Firm’s Supply CurveĪ perfectly competitive firm (or a price-taking firm) is a firm that sells its goods or services in a market with perfect competition. Why Are Perfectly Competitive Firms Price Takers?
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