Suppose XYZ Corp

question 119

Multiple Choice

Suppose XYZ Corp.is a profit-maximizing firm that is producing and selling 1 billion disposable wooden chopsticks per month at a price of $0.04 per unit.Further,suppose market demand for this product is 1.5 billion units per month.What can we conclude about market structure in this case?

• A)This is not a perfectly competitive market because XYZ Corp.is small relative to the size of the industry.
• B)This is not a perfectly competitive market because XYZ Corp.is selling its product at a price that is not equal to marginal cost.
• C)This is a perfectly competitive market because there is freedom of entry and exit in the industry.
• D)This is a perfectly competitive market because the product is homogeneous.
• E)This is not a perfectly competitive market because XYZ Corp.is large relative to the size of the industry.

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