Which of the Following Assumptions About Perfectly Competitive Markets Is

question 20

Multiple Choice

Which of the following assumptions about perfectly competitive markets is primarily responsible for firms having zero economic profit in long run equilibrium?

• A)homogeneous product
• B)consumers are aware of all firms' prices
• C)each firm is small relative to the size of the industry
• D)freedom of entry and exit in the industry
• E)strategic behaviour

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Definitions:

Defence Mechanism

Psychological strategies brought into play by individuals to protect themselves from unacceptable thoughts or feelings.

Critical

Having a crucial or decisive importance in the success, failure, or existence of something.

Loving

An intense feeling of deep affection, care, and attachment towards someone or something, often characterized by emotional warmth and a desire for close bonds.

Reaction Formation

A defense mechanism in which an individual unconsciously replaces unacceptable thoughts or feelings with their opposites.