Which of the Following Statements About a Perfectly Competitive Market

question 112

Multiple Choice

Which of the following statements about a perfectly competitive market is INCORRECT?

• A) There are many sellers, each supplying a small quantity.
• B) There are many buyers, each purchasing a small quantity.
• C) The market sell homogeneous products.
• D) Buyers and sellers cannot enter exit the market freely.

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Definitions:

Market Price

The prevailing price for transactions involving an asset or service in a certain market.

Purely Competitive

A market structure characterized by many buyers and sellers, free entry and exit from the market, and a homogeneous product, where no single buyer or seller can influence the market price.

Maximized Profits

Maximized profits refer to the maximum earnings a firm can achieve when the difference between total revenue and total cost is greatest.

Purely Competitive

A market structure characterized by a large number of sellers and buyers, homogeneous products, and free entry and exit from the market.