In which of the following market forms does a firm have no control over the price of its product and must accept the prevailing market price?

Introduction / Context:
Different market structures are characterised by different degrees of control over price. In some markets, firms are price takers and have virtually no power to influence the market price. In others, firms have varying degrees of market power and can set prices above marginal cost. This question asks you to identify the market form in which an individual firm does not exercise control over price and simply accepts the going market price.

Given Data / Assumptions:
- Four market forms are listed: monopoly, perfect competition, oligopoly and monopolistic competition.
- The firm in question has no control over price.
- We assume standard textbook definitions of these market structures.

Concept / Approach:
In perfect competition, there are many buyers and many sellers, products are homogeneous, there is free entry and exit, and each firm is so small relative to the market that it cannot influence the price. As a result, each firm is a price taker: it can sell any quantity at the prevailing market price but cannot charge a higher price. In monopoly, oligopoly and monopolistic competition, firms have some degree of market power and therefore some control over price, subject to demand conditions.

Step-by-Step Solution:
Step 1: Consider perfect competition. Here, because products are identical and there are many sellers, a single firm cannot affect the market price by its individual output decisions.Step 2: In a monopoly, there is only one seller, so that seller has substantial control over price, constrained mainly by the demand curve.Step 3: In an oligopoly, a few large firms dominate the market, and each has significant influence over price and output, often considering rivals’ reactions.Step 4: In monopolistic competition, many firms sell differentiated products, giving each firm some pricing power due to brand loyalty.Step 5: Therefore, the only market form where the firm truly has no control over price is perfect competition.

Verification / Alternative check:
You can verify by recalling the typical cost and revenue diagram for a perfectly competitive firm. The demand curve facing the firm is perfectly elastic at the market price, so the marginal revenue curve is horizontal. If the firm tries to charge more than the market price, it loses all its customers because they can buy the same product elsewhere. This confirms that the firm is a price taker.

Why Other Options Are Wrong:
Monopoly is wrong because the monopolist is a price maker. Oligopoly is wrong because a small number of firms collectively influence market prices. Monopolistic competition is wrong because product differentiation gives firms some latitude to set prices above marginal cost.

Common Pitfalls:
Students sometimes confuse perfect competition with monopolistic competition because both involve many firms. The key difference is that in perfect competition, products are homogeneous, whereas in monopolistic competition they are differentiated. Differentiation is what gives firms pricing power. Remembering this helps keep the concept of price taking clearly associated with perfect competition.

Final Answer:
A firm has no control over price in a Perfect competition market.