Free entry and exit of the firms
The demand curve of firm is horizontal
The marginal revenue curve is horizontal
An individual firm can influence the price
✅ The correct answer is D.
An individual firm can influence the price is not a characteristic of perfect competition. All goods in a perfectly competitive market are considered perfect substitutes, and the demand curve is perfectly elastic for each of the small, individual firms that participate in the market. These firms are price takers–if one firm tries to raise its price, there would be no demand for that firm’s product.
An individual firm can influence the price is not a characteristic of perfect competition. All goods in a perfectly competitive market are considered perfect substitutes, and the demand curve is perfectly elastic for each of the small, individual firms that participate in the market. These firms are price takers–if one firm tries to raise its price, there would be no demand for that firm’s product.