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How is a firm under perfect competition a price-taker but the industry is a price-maker? |
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Answer» On the other hand, the number of firms in the industry is so large that any individual firm, through its action, can not influence the market price. They have to take the price determined at the industry level as given. So, the firms are considered to be price takers. Under perfect competition, the price is determined by intersection of demand and supply curve of the industry as a whole. So, the industry is called the price maker. |
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