What type of industry is described by the term "perfect competition"? an industry in which numerous price-taking firms produce identical products an industry in which a few price-taking firms produce identical products an industry in which firms are price takers and compete for market share by varying the qualitative characteristics of products an industry in which numerous firms are price makers and produce identical products

What type of industry is described by the term "perfect competition"? an industry in which numerous price-taking firms produce identical products an industry in which a few price-taking firms produce identical products an industry in which firms are price takers and compete for market share by varying the qualitative characteristics of products an industry in which numerous firms are price makers and produce identical products

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Under conditions of perfect or pure competition, or close to those conditions, producers (firms) are what are called “price takers”. This means that the price for the product that they are selling is determined by the market. No matter how little or how much product they supply, they can sell all they want at that price. If they were to price their product higher, they will sell zero. Which of the following is true? The price is equal to marginal revenue but not average revenue The price is equal to marginal revenue and average revenue The price is equal to average revenue but is not equal to marginal revenue The price is above both marginal revenue and average revenue
In perfect competition, the marginal revenue curve and the firm's demand curve are identical is always above the firm's demand curve is always below the firm's demand curve is upward sloping
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In pure competition, product price is Greater than marginal revenue Equal to marginal revenue Equal to total revenue Greater than total revenue