Under which market form a firm is called a 'price taker' and why?

1.	Under which market form a firm is called a 'price taker' and why?
Answer» <html><body><p></p>Solution :Perfect competition refers to a <a href="https://interviewquestions.tuteehub.com/tag/market-25464" style="font-weight:bold;" target="_blank" title="Click to know more about MARKET">MARKET</a> situation where there are very large no. of buyers and sellers dealing in a <a href="https://interviewquestions.tuteehub.com/tag/homogeneous-1028736" style="font-weight:bold;" target="_blank" title="Click to know more about HOMOGENEOUS">HOMOGENEOUS</a> product at a price fixed by the market.The no. of sellers is so large that the <a href="https://interviewquestions.tuteehub.com/tag/share-25805" style="font-weight:bold;" target="_blank" title="Click to know more about SHARE">SHARE</a> of each seller is insignificant in the total supply. Hence, an individual seller cannot influence the market price. Similarly, a single buyer's share in total purchase is so insignificant because of their large no. that an individual buyer cannot influence the market price. Under such conditions, price of a commodity is <a href="https://interviewquestions.tuteehub.com/tag/determined-949906" style="font-weight:bold;" target="_blank" title="Click to know more about DETERMINED">DETERMINED</a> by the market forces of demand and supply and each buyer and seller has to accept the same price. As a result, uniform price prevails in the market.</body></html>

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