A General Competitive Equilibrium

question 47

Multiple Choice

A general competitive equilibrium:

• A)must lie on the production contract curve.
• B)requires the input prices to be equal to the respective marginal productivities.
• C)can be attained only if the inputs are perfectly substitutable.
• D)is attained at a point where two isoquants intersect each other.

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Definitions:

Units

Basic quantities or measurements used to express a variable or quantity in a specific context, such as units of currency or units of measurement.

Monopolistic Competition

A market structure in which many firms sell products or services that are similar but not identical, allowing for some degree of market power and product differentiation.

Non-price Competition

A strategy where businesses compete on factors not related to price, such as product quality, service, or brand reputation.

Horizontal Demand Curve

A horizontal demand curve represents a situation in economics where the demand for a product is perfectly elastic, meaning consumers would buy an infinite quantity at a certain price but none if the price increases.