Which of the Following Is Characteristic of a Perfectly Competitive

question 21

Multiple Choice

Which of the following is characteristic of a perfectly competitive market?

• A)A small number of firms.
• B)Exit of small firms when profits are high for large firms.
• C)Zero economic profit in the long run.
• D)Marginal revenue lower than price for each firm.

---

Definitions:

Price Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, indicative of the flexibility of producers.

Midpoint Method

A technique used in economics to calculate the elasticity between two points on a demand curve by using their average.

Price Elasticity of Supply

A measure of how much the quantity supplied of a good changes in response to a change in the price of that good, indicating the responsiveness of producers.

Midpoint Method

A formula used in economics to calculate the elasticity of a good or service, offering a more accurate measurement by averaging the starting and ending points.