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BusinessBusiness
4 June, 13:10

In a perfectly competitive industry, influence over price is exerted by

a. the largest firms.

b. individual sellers.

c. the forces of supply and demand.

d. individual buyers.

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Answers (1)
  1. 4 June, 13:59
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    (C) the forces of supply and demand

    Explanation:

    In a perfectly competitive industry, no single buyer nor seller will be able to influence prices thus marking the forces of demand and supply (the invisible hand) the determinant of pricing. Each buyer or seller will only account for a minute portion of total demand and supply thus making their influence of market price insignificant.

    Options (A), (B) and (D) are incorrect as the largest firms, individual sellers and individual buyers do not influence pricing over price in a perfectly competitive market.
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