ECONOMICS
INCENTIVES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A
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B
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C
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D
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Detailed explanation-1: -Firms in a perfectly competitive market are said to be price takers-that is, once the market determines an equilibrium price for the product, firms must accept this price.
Detailed explanation-2: -Economic market structures can be grouped into four categories: perfect competition, monopolistic competition, oligopoly, and monopoly.
Detailed explanation-3: -In monopolistic competitionMarket in which many sellers supply differentiated products., we still have many sellers (as we had under perfect competition).
Detailed explanation-4: -In a perfectly competitive market, buyers and sellers possess perfect knowledge. This implies that no firm can charge a different price and no buyer is willing to pay a higher price for the same commodity. Sellers are completely aware of the prices prevailing in the market.