Which of the Following Best Explains Why Price in Competitive

question 399

Multiple Choice

Which of the following best explains why price in competitive price-taker markets will tend to be driven to the minimum per-unit cost?

• A) homogeneous products.
• B) few sellers.
• C) firms face downward-sloping demand curves.
• D) free entry and exit.

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Definitions:

Fraction

A numerical quantity that is not a whole number, represents a part of a whole, typically written with a numerator and a denominator separated by a slash.

Consumers

Individuals or households that use goods and services generated within the economy.

Import Quota

A restriction set by the government on the amount or cost of products allowed to be brought into a country from abroad.

Tariff

A tax imposed by a government on goods and services imported from other countries.