Real-World Markets That Approximate the Four Assumptions of the Theory

question 103

Multiple Choice

Real-world markets that approximate the four assumptions of the theory of perfect competition include the

• A)automobile market.
• B)soft drink market.
• C)stock market.
• D)clothing market.

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Definitions:

Average Variable Costs

Calculated by dividing the total variable costs by the quantity of output produced; it's the variable cost per unit of output.

Average Variable Costs

an economic measure representing variable costs (expenses that change with production levels) averaged over a quantity of output.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes as the production volume is increased.

Average Variable Cost Curve

A graph that displays how the variable cost per unit changes with changes in output level.