The Theory of Perfect Competition Is Built on Several Assumptions

question 13

Multiple Choice

The theory of perfect competition is built on several assumptions, including that

• A) the individual firm can influence demand by advertising.
• B) any firm can easily enter or leave the industry.
• C) the individual firm can affect the price of the product it sells.
• D) there are few producers of an identical product.
• E) each firm must earn economic profits to remain in the industry.

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Definitions:

Late Majority

A category of consumers that rely on others for information, buying a good or service because others have already done so.

Customer Service

The support and assistance provided by a company to those who buy or use its products or services.

Product Life Cycle

The progression of a product through different stages from introduction to growth, maturity, and decline in the market.

Laggard

Term used to describe a person, organization, or entity that is slow to adopt new technologies, practices, or innovations, often resistant to change.