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Which of the following statements is true of a perfectly competitive market

Which of the following statements is true of a perfectly competitive market?

A) Sellers in the market produce differentiated goods.

B) There is free entry and exit in the market.

C) There are only few buyers and sellers in the market.

D) Sellers and buyers are both price-makers.

2) In a perfectly competitive market:

A) the sellers produce identical goods.

B) there are restrictions on the entry of new firms.

C) each seller charges a different price for its product.

D) bargaining over prices is a common phenomenon.

3) In a competitive market, there are a ________ number of buyers and a ________ number of sellers.

A) large; small

B) small; large

C) small; small

D) large; large

4) In a perfectly competitive market, since an individual seller tends to sell only a fraction of the total amount of the good produced:

A) he can independently determine the market price.

B) he can charge prices above the equilibrium price.

C) his individual choices do not affect market outcomes.

D) he always earns positive profit.

5) Sellers in a perfectly competitive market:

A) are price-takers.

B) sell differentiated goods and services.

C) are not allowed to exit the market.

D) are small in number.

6) A firm is said to be a price-taker if:

A) it can affect the market price of goods by changing its supply.

B) it sells as much of any good as it wants at the prevailing market price.

C) consults the government before fixing the price of its goods and services.

D) it's not free to enter a new market or exit from an existing market.

7) Price in a perfectly competitive market:

A) is affected by government policies.

B) is determined through auctions.

C) is affected by the combined decision of all sellers.

D) is determined by buyers alone.

8) Which of the following examples best describes the concept of free entry?

A) Jack has an old cell phone which he wants to sell. He opens an account on eBay and auctions it off.

B) Purecircuit Corp. wants to expand its production so it doubles its annual recruitment.

C) System Corp. decides to charge a price lower than the market price to increase its market share.

D) The government enters the market to correct any shortage or surplus in the market for gasoline.

9) What are the conditions which characterize the sellers' side in a perfectly competitive market?

Mar 14 2020 View more View Less

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