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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Definitions:

Photoreceptor Cells

Specialized cells found in the retina of the eye that detect light and convert it into electrical signals for vision.

Ciliary Ring

Portion of the ciliary body of the eye that contains smooth muscle cells.

Iris

The colored part of the eye surrounding the pupil, controlling the amount of light entering the eye by adjusting the size of the pupil.

Sclera

The white, outer layer of the eyeball, providing protection and form.