If a Resource Is Purchased and Sold in a Perfectly

question 107

Multiple Choice

If a resource is purchased and sold in a perfectly competitive market:

• A)there are a large number of resource suppliers and the resources are identical.
• B)there is a single buyer of resource and the resources are identical.
• C)there is a single buyer of resource and the resources are differentiated.
• D)there is a large number of resource suppliers and the resources are differentiated.
• E)there are a large number of resource suppliers and there is no entry or exit.

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Definitions:

Short-Run Marginal Costs

The cost to produce one additional unit of a good or service in the short run, where at least one input is fixed.

Market Price

The present cost at which a good or service can be purchased or sold in the market.

Profit-Maximizing Firm

A company that chooses its level of output and pricing strategy to achieve the highest possible profit based on its costs and the market demand.

Price Elasticity Of Demand

A measure in economics indicating how the quantity demanded of a good changes in response to a change in its price.