Question

In a perfectly competitive market, what can one farmer do to change the market price?

	a.	Sell more wheat.
	b.	Compete with the wheat market for sellers.
	c.	The firm cannot change the market price.
	d.	Sell less wheat.
	e.	Compete with neighboring farms for customers.

Answer 1

The correct answer is 'Option C'.

In a perfectly competitive market, there are many buyers and many sellers. Each seller sell homogeneous products in the market because of which the price charged by each profit-maximizing firm equals the marginal cost. This is because, any individual firm cannot influence the market price on its own due to large number of sellers selling homogeneous goods. The price is determined by the market forces of demand and supply. Therefore, the correct answer is 'Option C'.