Which of the Following Is Characteristic of Perfectly Competitive Markets

question 112

Multiple Choice

Which of the following is characteristic of perfectly competitive markets?

• A) Differentiated products
• B) A large number of firms
• C) Price below marginal cost
• D) Significant barriers to entry

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Definitions:

Subsidy

Financial assistance granted by the government or a public body to support businesses, reduce costs, and encourage economic activities.

Domestic Firms

Companies that operate primarily within the country of their incorporation, focusing on serving the local market.

Inefficient

Lacking in effectiveness or productivity, resulting in wasted resources or effort without achieving the desired output.

Economies Of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation increases, leading to a lower cost per unit.