Which of the Following Assumptions Applies to Both Perfect Competition

question 166

Multiple Choice

Which of the following assumptions applies to both perfect competition and monopolistic competition?

• A)many buyers and few sellers
• B)easy entry into the market, but difficult exit from the market
• C)profit is maximized at the level of output for which MR = MC
• D)firms produce and sell a homogeneous product

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Definitions:

Marketable Securities

Liquid financial instruments that can easily be converted into cash, often used for short-term investments.

Cash Balances

Available cash on hand or in bank accounts that a company uses for daily operations.

Investments in Inventory

Funds allocated by a business to purchase goods and materials held for resale or production.

Minimum Costs

The lowest amount that can be spent on the production of a good or service while maintaining its quality.