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 statements is not true of firms in perfect competition
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All producers charge the same price
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All producers make the same product
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Each firm tries to sell more by reducing its price
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There are no barriers of entry
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Explanation:
Detailed explanation-1: -Answer and Explanation: The correct option is (c) Each firm chooses the price it wants to sell. Since there are large number of sellers in the market, any change in supply by the sellers can not influence the market price.
Detailed explanation-2: -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-3: -The correct answer is C. restrictions on entry into the market.
Detailed explanation-4: -Answer and Explanation: Option D is correct. In the short run, perfectly competitive firm can make losses or positive economic profits.
There is 1 question to complete.