Which of the Following Is Not an Assumption Economists Make

question 117

Multiple Choice

Which of the following is not an assumption economists make when using the model of perfect competition?

• A) Firms seek to maximize profits.
• B) The products of each firm in a particular market are identical.
• C) Each firm sets it price equal to its average total cost.
• D) There is easy entry and exit.

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Definitions:

Short-Term Investments

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle, whichever is longer.

Long-Term Investments

Investments that are not readily marketable or that management does not intend to convert into cash within the next year or operating cycle, whichever is longer.

Short-Term Price Differences

Variations in prices or costs that occur over a short period, often related to fluctuations in demand, supply, or market conditions.

Fair Value

An estimate of the market value of an asset or liability, based on current market prices or valuations.