ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is true about a perfectly competitive market?
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Firms produce standardized commodities
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Not all sellers are fully informed about technology
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One individual buyer or seller can usually influence price
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It is difficult for firms to enter the market
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Explanation:
Detailed explanation-1: -Answer and Explanation: The correct answer is b. The firm cannot affect the market price for its good. In a perfectly competitive market, a single firm cannot influence the market price.
Detailed explanation-2: -Answer and Explanation: Option D is correct. In the short run, perfectly competitive firm can make losses or positive economic profits.
Detailed explanation-3: -In a perfectly competitive market, products are standardized, and there is no difference between one seller’s product and another seller’s product. Therefore, if a seller tries to raise a price above the d. market equilibrium price, then consumers simply switch and buy the product from another firm.
There is 1 question to complete.