Because Market Price Remains Constant as a Perfectly Competitive Firm

question 168

Multiple Choice

Because market price remains constant as a perfectly competitive firm expands output, each firm faces

• A)a downward-sloping demand curve
• B)a horizontal demand curve
• C)constant returns to scale
• D)constant costs
• E)diminishing marginal revenue

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Definitions:

Partnership Interest

Ownership share or participation in a partnership that usually entitles the holder to a proportion of the partnership's profits and assets.

Capital Contributions

The funds or assets initially invested in a business or partnership by its owners or partners.

Ratio

A relationship in numbers expressing the frequency with which one value encompasses or is encompassed by another.

Lowest Terms

The simplest form of a fraction when both the numerator and denominator cannot be any smaller while still being whole numbers.