Respuesta :
False. In competitive industry there is no advertising and firms take price because there are many firms and all are producing homogeneous product and consumers have all the information.
Why is a perfectly competitive firm a price taker?
A perfectly competitive firm is known as a price taker because the pressure of competing firms forces them to accept the prevailing equilibrium price in the market. If a firm in a perfectly competitive market raises the price of its product by so much as a penny, it will lose all of its sales to competitors.
Who is a price taker in a competitive market?
In most competitive markets, firms are price-takers. If firms charge higher than prevailing market prices for their products, consumers will simply purchase from a different lower-cost seller to the extent that these firms all sell identical (substitute) goods or services.
What is a Price Taker?
A price taker is a business that sells such commoditized products that it must accept the prevailing market price for its products. For example, a farmer produces wheat, which is a commodity; the farmer can only sell at the prevailing market price.
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