Asked by
Jessica Hazell
on Oct 27, 2024
Verified
When perfect competition prevails,which characteristic of firms are we likely to observe?
A) They erect and maintain barriers to new firms.
B) There are not many of them.
C) They all try to highlight the substantial product differentiation between producers.
D) They are all price takers.
Perfect Competition
A market structure characterized by a large number of small firms, identical products, and free entry and exit, leading to price takers.
Price Takers
Entities in a market that accept the prevailing prices because they do not have enough market power to influence prices themselves.
Product Differentiation
A business tactic employed to differentiate their product in the market from those that are similar.
- Acquire an understanding of the various market configurations and the attributes characteristic of perfect competition.
Verified Answer
TC
Learning Objectives
- Acquire an understanding of the various market configurations and the attributes characteristic of perfect competition.