In a free market economy, firms operating in a perfectly competitive industry are said to have only one major choice to make. Which of the following correctly sets out that choice?

A. what quantity to produce

B. what price to charge

C. what quantity of labor is needed

D. what quality to produce

The correct answer is D. what quality to produce.

Explanation:

The world of perfect competition is a world of price-acceptors. A perfectly competitive company sells a homogeneous product (identical to that sold by others in the industry). It is so small in relation to its market that it cannot influence the market price; Just consider it given. When a farmer sells a homogeneous product such as wheat, it is sold to a large number of buyers at the market price of the quintal. In the same way that consumers must generally accept the prices charged by Internet providers or cinemas, so competitive companies must accept the market prices of the wheat or oil they produce.