When Perfect Competition Prevails, Which of the Following Characteristics of Firms

question 37

Multiple Choice

When perfect competition prevails, which of the following characteristics of firms are we likely to observe?

• A) None of them ever has diminishing marginal returns.
• B) They all try to operate where price equals average variable cost.
• C) They all try to operate where price equals total cost.
• D) They are all price takers.

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Definitions:

Analgesia

The inability to feel pain while still conscious, often induced through use of medication or psychological techniques.

Hyperalgesia

An increased sensitivity to pain, which can be caused by damage to nociceptors or peripheral nerves.

Hyperactivity

A condition marked by excessive movement, impulsiveness, and difficulty in maintaining attention, often seen in ADHD.

Hypoactivity

Reduced activity or underperformance in certain areas or systems of the body or brain.