The Assumption That a Perfectly Competitive Industry Has Many Sellers

question 464

Multiple Choice

The assumption that a perfectly competitive industry has many sellers, each selling an identical product, leads to the conclusion that

• A) consumers get to see a variety of outputs.
• B) there are many buyers.
• C) the economic profit will be positive in the long run.
• D) firms are price takers.

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Definitions:

Marginal Cost

The rise in expenses incurred by the production of an extra unit of a product or service.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single participant has significant market power.

Sales Volume

The quantity of goods or services sold by a company within a specific period.

Price

The quote of currency expected, called-for, or donated as payoff for something.