Which of the Following Is NOT a Characteristic of a Perfectly

question 329

Multiple Choice

Which of the following is NOT a characteristic of a perfectly competitive industry?

• A) There are many firms.
• B) There are no restrictions on entry into the market.
• C) Each firm produces a slightly differentiated product.
• D) Each firm takes price as given, determined by the equilibrium of industry supply and industry demand.

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Definitions:

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Regression Equation

An equation used in statistics to describe the relationship between a dependent variable and one or more independent variables.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between the expected return and risk of investing in a security.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, typically represented by the yield on government securities like U.S. Treasury bonds.