In a perfectly competitive market, an individual firm is considered a price taker because its output is so small relative to total market supply that it cannot influence the market price.
Answer: Answer
Answer
The statement is True.
The statement correctly identifies the fundamental assumption of price-taker behavior in perfect competition, which arises because each firm's market share is too small to affect price.
Step-by-Step Solution
Key Concept
Price-Taker Characteristic of Perfect Competition