ECONOMICS
COMPETITION AND MARKET STRUCTURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Products are identical and price is purely set by the market
|
|
|
A government agency sets price floors for all products in that market
|
|
|
A few large firms dominate the market with their slightly differentiated products
|
|
|
There is only one seller, so the competition is perfect
|
Detailed explanation-1: -Under perfect competition, price is equal to marginal cost as well as marginal revenue.
Detailed explanation-2: -Perfect competition is a hypothetical market where there are a large number of buyers and sellers selling homogeneous products. This indicates that all the products are perfect substitutes for each other. All the sellers sell the product at a uniform price.
Detailed explanation-3: -Yes. Perfect competition is the same as pure competition. Either term describes a model market with numerous buyers and sellers of identical products. Those two characteristics mean that no individual firm has any control over the prices they can charge.
Detailed explanation-4: -What Is Perfect Competition? In economic theory, perfect competition occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barriers, buyers have perfect or full information, and companies cannot determine prices.