Which of the Following Could Be True of Perfect Competition

question 245

Multiple Choice

Which of the following could be true of perfect competition but not of monopoly?

• A)The government licenses production of the good to a few firms.
• B)The government grants a patent for the good.
• C)A firm can earn economic profit in the long run.
• D)If price falls below average variable cost, it pays to shut down.
• E)There are no barriers to entry.

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Definitions:

Cash Dividend

A cash disbursement from a corporation's earnings to its shareholders.

Common Stock

A type of equity security that represents ownership in a corporation, with shareholders entitled to vote on corporate matters and receive dividends.

Net Income

The amount of total revenues that exceeds total expenses of a company during a specific time period.