In a Perfectly Competitive Industry, a Large Number of Firms

question 50

True/False

In a perfectly competitive industry, a large number of firms have products and services that are similar to each other and it is not very costly for firms to enter into or exit these markets.

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Definitions:

Effective Capacity

The capacity a firm can expect to achieve, given its product mix, methods of scheduling, maintenance, and standards of quality.

Operating Constraints

Limitations or restrictions that affect the performance or output of a process or system.

Maximum Output

The highest level of production that a company can sustain with the current resources and technologies.

Capacity

The throughput, or number of units a facility can hold, receive, store, or produce in a period of time.