Which of the Following Could Be True of Perfect Competition

question 245

Multiple Choice

Which of the following could be true of perfect competition but not of monopoly?

• A)The government licenses production of the good to a few firms.
• B)The government grants a patent for the good.
• C)A firm can earn economic profit in the long run.
• D)If price falls below average variable cost, it pays to shut down.
• E)There are no barriers to entry.

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Definitions:

Auditory Image

A mental representation of a sound when the sound is not physically present.

Proposition

A statement or assertion that expresses a judgment or opinion, which can be either true or false.

Cognitive Schema

Mental structures that an individual uses to organize knowledge and guide cognitive processes and behavior.

Prototype

An original model or first form of something from which other forms are copied or developed.