What factor can a firm in a perfectly competitive market control in the short run?
Select one:
a. The supply curve
b. Quantity produced
c. Quantity demanded
d. Price
In a perfectly competitive market, a firm has limited control over certain factors in the short run. The primary factor that a firm can control is the quantity it produces. Therefore, the correct answer is b. Quantity produced.
In a perfectly competitive market, the firm is a price taker, meaning it cannot directly control the price of its product. Instead, it takes the market price as given and adjusts its production quantity accordingly. The firm's main goal is to maximize its profit, which is achieved by producing at a level where the marginal cost equals the market price.
While a firm can influence the supply curve by changing its production quantity, it does not have full control over it. The supply curve is determined by the overall market conditions, including the actions of all firms in the industry.
Quantity demanded, on the other hand, is determined by factors outside of the firm's control, such as consumer preferences, income levels, and market demand conditions.