One Assumption of the Perfectly Competitive Model Is Free Entry

question 137

Multiple Choice

One assumption of the perfectly competitive model is free entry and exit. This assumption most directly leads to the implication that:

• A)firms will have to spend money on advertising.
• B)positive economic profit is only possible in the short run.
• C)firms will compete on the basis of better service rather than lower prices.
• D)a long-run equilibrium cannot be achieved.

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Weekly World News

A largely fictional news tabloid known for its offbeat and often bizarre stories, blurring the lines between fact and fiction in journalism.

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Profit-Maximizing Price

The pricing point at which a firm can achieve the highest possible profit, given the demand and cost conditions.

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A brand of electric beds that can be adjusted to various positions for comfort and health benefits.