If All Conditions for a Perfectly Competitive Market Are Met

question 26

Multiple Choice

If all conditions for a perfectly competitive market are met,

• A) firms face sunk cost when entering the market.
• B) firms' demand curves are horizontal.
• C) the market demand curve is horizontal.
• D) the firms' demand curves are downward-sloping.

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Definitions:

Commodity

A basic good used in commerce that is interchangeable with other goods of the same type, often applied to raw materials and agricultural products.

Profit

The financial gain realized when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Racial Passing

The act of a person classified as a member of one racial group being accepted or identifying as a member of another, often to escape racial discrimination.

White Ethnics

Refers to individuals of European descent, other than those of Anglo-Saxon background, who maintain cultural practices, values, or ways of life associated with their heritage.