In an Industry with a Large Number of Firms

question 164

Multiple Choice

In an industry with a large number of firms,

• A) each firm will produce a large quantity, relative to market demand.
• B) one firm will dominate the market.
• C) collusion is impossible.
• D) competition is eliminated.
• E) barriers to exit must exist.

---

Definitions:

Rationalization

A defense mechanism where controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.

Denial

A psychological defense mechanism in which confrontation with a reality or fact is avoided by denying the existence of the problem or reality.

Psychosexual Stage

Refers to the stages of childhood development in Freudian psychology, each characterized by different modes of obtaining pleasure from the psychosexual energy.

Erogenous

Zones or areas of the body that, when stimulated, produce sexual arousal and pleasure.