One Assumption of the Perfectly Competitive Model Is That of Free

question 48

Multiple Choice

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

• A)firms will spend significant amounts of money on advertising.
• B)positive economic profits will only be possible for in the short run.
• C)firms will compete on the basis of better service and amenities rather than price.
• D)a single firm will emerge as the industry leader.

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Definitions:

Planning Budget

A budget designed for planning and preparing the financial strategies of an organization, often used to estimate future revenues and expenses.

Employee Salaries

Fixed payments made regularly by an employer to an employee for their work, not typically dependent on the hours worked.

Wells Serviced

The number of oil or gas wells undergoing maintenance, inspection, and repair within a specified timeframe.

Spending Variance

Spending variance is the difference between the actual amount spent and the amount budgeted or expected to be spent.