Which of the Following Is a Defining Characteristic of All

question 34

Multiple Choice

Which of the following is a defining characteristic of all perfectly competitive markets?

• A)Each firm in the market faces a perfectly inelastic demand curve.
• B)The market demand curve is perfectly elastic.
• C)All firms sell the same standardized product.
• D)Consumers display strong brand loyalty.

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Definitions:

Efficiency

The optimal allocation of resources in a way that maximizes productivity or utility.

Price Discrimination

Price discrimination involves a seller charging different prices for the same product or service to different customers, based on factors like demand, customer attributes, or purchase volume.

Monopolistic Competition

Monopolistic competition describes a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and price setting.

Perfect Competition

A market structure characterized by many buyers and sellers, identical products, and free entry and exit, leading to efficient outcomes.