The correct way to complete the sentence is "A firm must be able to limit competition if it is to exercise control over the price of its product," option D.
Competition means there are many firms acting in the same market. The more firms there are, the more competitive the prices, that is, the cheaper the product, since each firm will try its best to get customers for itself.
If a firm is able to limit competition, then it can determine the price of the product. If there are only two firms acting rather than 100, chances are that prices will not be lowered too much. If only one firm is acting, that firm can set whatever price, since there is no one to compete with them.
With the information above in mind, we can choose option D as the correct answer.
This is the complete question with the missing answer choices:
A firm must be able to ________ competition if it is to exercise control over the price of its product.
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