Suppose a Market Is Initially Perfectly Competitive with Many Firms

question 177

Multiple Choice

Suppose a market is initially perfectly competitive with many firms selling an identical product. Over time, however, suppose the merging of firms results in the market being served by only three or four firms selling this same product. As a result, we would expect

• A)an increase in market output and an increase in the price of the product.
• B)an increase in market output and an decrease in the price of the product.
• C)a decrease in market output and an increase in the price of the product.
• D)a decrease in market output and a decrease in the price of the product.

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Definitions:

Synapse

The small gap between two adjacent neurons, consisting of the presynaptic and postsynaptic neurons’ membranes and the space between them.

Dendrite

A projection of a neuron that receives signals (electrical and chemical) from other neurons or sensory cells, facilitating neural communication.

Axon

A long, slender projection of a neuron that conducts electrical impulses away from the neuron's cell body.

Synapse

The junction between neurons where the exchange of information occurs through chemical neurotransmitters.