In a Competitive Free Market, When the Price of a Good

question 144

True/False

In a competitive free market, when the price of a good rises, the marginal cost of every producer of the good rises equally.

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Definitions:

Perfectly Competitive

Refers to markets that meet the criteria of perfect competition, ensuring no single buyer or seller can influence prices or market conditions.

Diminishing Returns

A decrease in the marginal output of a production process as the amount of a single factor of production is incrementally increased, holding all other factors constant.

Value Added

The amount by which the value of goods or services is increased at each stage of its production, exclusive of initial costs.

Marginal Product

The increase in output resulting from a one-unit increase in the amount of a single input, holding all other inputs constant.