Which of the Following Characteristics Relate(s) to Perfect Competition

question 114

Multiple Choice

Which of the following characteristics relate(s) to perfect competition?
I. An industry is dominated by several large firms.
II. Consumers cannot distinguish one firm's product from another.
III. New firms can easily enter the industry.

• A) I and II
• B) II and III
• C) II
• D) III

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Definitions:

Short Run

A period of time during which at least one input of production is fixed, affecting the firm's ability to adjust production levels.

Variable Cost

A cost that depends on the quantity of output produced; the cost of a variable input.

Average Total Cost

This is the sum of all the costs of production (fixed and variable) divided by the number of units produced, providing a comprehensive understanding of production expenses.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand.