If Two Small Perfectly Competitive Firms Merge, the Merged Firm

question 23

Multiple Choice

If two small perfectly competitive firms merge, the merged firm will be:

• A)a price-taker.
• B)a market leader.
• C)a price-discriminator.
• D)an oligopoly.

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Definitions:

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.

Indifference Curves

Graphical representations in economics showing different combinations of goods that give a consumer equal satisfaction and utility.

Affordable

Describes something that is reasonably priced, or within one's financial means.

Income Earns

The compensation received by an individual or generated by an entity in exchange for labor or services or as earnings from investments.