In the context of perfect competition, a purely competitive seller is:

• A. restricted to selling only differentiated products
• B. a monopolist with significant market power
• C. a price taker who cannot influence the market price
• D. able to set prices above the market equilibrium

Answer: (C)

Verified step by step guidance

1. Understand the characteristics of a perfectly competitive market: many sellers, identical (homogeneous) products, free entry and exit, and perfect information.
2. Recognize that in perfect competition, each seller's product is a perfect substitute for another's, so products are not differentiated.
3. Recall that because there are many sellers offering identical products, no single seller can influence the market price; they must accept the market price as given.
4. Define a 'price taker' as a seller who accepts the market price and cannot set prices above it without losing all customers.
5. Conclude that a purely competitive seller is a price taker who cannot influence the market price, unlike a monopolist who has market power to set prices.