The Theory of Perfect Competition Is Built on Several Assumptions,including

question 141

Multiple Choice

The theory of perfect competition is built on several assumptions,including that

• A)the individual firm can affect the price of the product it sells.
• B)the individual firm can influence demand by advertising.
• C)each firm must earn economic profits to remain in the industry.
• D)any firm can easily enter or leave the industry.
• E)there are few producers of an identical product.

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Definitions:

International Trade

The exchange of goods, services, and capital between countries and territories, allowing for greater variety of consumption and efficiencies in production.

Productive

Refers to the ability of an individual, company, or economy to produce goods or services efficiently and effectively.

Tariff Revenue

Income generated by the government through the imposition of taxes on imported goods.

Tariff

A tax imposed by a government on imported or exported goods to control trade flows, raise revenue, or protect domestic industries.