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In Part,perfect Competition Arises If

question 189

Multiple Choice

In part,perfect competition arises if
i.each firm's minimum efficient scale is large relative to demand.
ii.each firm produces a good or service identical to those produced by its many competitors.
iii.there are significant barriers to entry.


Definitions:

Marginal Physical Product

The additional output resulting from a one-unit increase in the quantity of a particular input, holding all other inputs constant.

Marginal Product

The extra output gained by incorporating one more unit of a given input in the production process, assuming all other inputs remain unchanged.

Average Product

The output per unit of input, calculated by dividing total product by the quantity of input.

Factor of Production

Resources used in the creation of goods and services, which include land, labor, capital, and entrepreneurship.

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