The Following Graphs Depict a Perfectly Competitive Firm and Its

question 92

Multiple Choice

The following graphs depict a perfectly competitive firm and its market.
Assume that all firms in this industry have identical cost functions.
A starting assumption about this industry was that all of the firms had identical cost functions.This assumption

• A) is unrealistic because all firms are unique.
• B) is realistic because any cost advantage of one firm will be quickly adopted by the others.
• C) is unrealistic because firms closely guard their production process secrets.
• D) is unrealistic because competition forces all firms to seek the most efficient production processes.

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Definitions:

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is a type of earthenware clay used in pottery, sculptures, and building construction, notable for its reddish-brown color when unglazed and fired.

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A bony, branching structure that grows from the skull of deer and some other mammals, often used for decorative or utilitarian purposes in human cultures.

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The horn of a rhinoceros, composed of keratin and often poached for its supposed medicinal properties.

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