Which of the Following Is True Under Conditions of Pure

question 163

Multiple Choice

Which of the following is true under conditions of pure competition?

• A) There are differentiated products.
• B) The market demand curve is perfectly elastic.
• C) No single firm can influence the market price by changing its production level.
• D) Each individual firm has the ability to set its own price.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company makes from its operations.

Unit Selling Price

The price at which an individual unit of a product is sold to customers.

Unit Variable Costs

These are the costs that change directly with the level of production or service activity, such as materials and labor.

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in neither profit nor loss.