In the Theory of Perfect Competition, the Assumptions of Many

question 7

Multiple Choice

In the theory of perfect competition, the assumptions of many buyers and sellers, the production of a homogeneous product, and the possession of all relevant information by buyers and sellers imply that the perfectly competitive firm

• A)sets the price it wishes.
• B)has a demand curve that is downward sloping.
• C)has a demand curve that is perfectly elastic.
• D)a and b
• E)a and c

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Definitions:

Price Increase

A price increase refers to a rise in the cost of goods or services, often as a response to inflation, increased production costs, or higher demand.

Decision-making Authority

is the power or right vested in individuals or groups to make important decisions within an organization.

Persuasive Communication

The process of using messages to influence others’ beliefs, attitudes, or behaviors.

Compliance

The action or practice of obeying rules, regulations, standards, or laws prescribed by regulatory agencies or internal guidelines.