44. Consider the following: I. Goods are heterogenous (differentiated). II. Firms are price takers. III. Firms can freely enter or exit the market. Which of the above statement(s) is(are) among the basic assumptions of perfectly competitive markets? a) I and II b) II and III c) I and III d) Only I

44. Consider the following: I. Goods are heterogenous (differentiated). II. Firms are price takers. III. Firms can freely enter or exit the market. Which of the above statement(s) is(are) among the basic assumptions of perfectly competitive markets? a) I and II b) II and III c) I and III d) Only I

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

44. Consider the following:
I. Goods are heterogenous (differentiated).
II. Firms are price takers.
III. Firms can freely enter or exit the market.
Which of the above statement(s) is(are) among the basic assumptions of perfectly competitive
markets?
a) I and II
b) II and III
c) I and III
d) Only I

Expert Solution

Step 1

Competitive market: - it is a market condition where there are many buyers and many sellers in the market and the product of all sellers are homogeneous, sellers or firms are price takers they have no control over prices.

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