Answer the following statements true (T) or false (F)
1. Perfect competition assumes that all products are identical and that no advertising exists.
2. Perfect competition assumes that a producer is interested in maximizing profit.
3. If all firms adhere to the conditions of perfect competition, short-run losses are avoided.
4. The aerospace industry is a good example of perfect competition.
1.TRUE
2. TRUE
3. FALSE
4. FALSE
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If the game in Scenario 13.13 were not played sequentially,
A) the only equilibrium would be (R2,C1 ). B) the only equilibrium would be (R1,C2 ). C) the only equilibria would be (R2,C1 ) and (R1,C2 ). D) the only equilibria would be (R2,C1 ), (R1,C2 ) and a mixed strategy equilibrium. E) there would not be any equilibrium.
An increase in the price of butter is likely to cause the demand for:
A. olive oil to increase. B. olive oilto decrease. C. butter to increase. D. butter to d.
An economy's production function has the constant-returns-to-scale property. If the economy's labor force doubled and all other inputs stayed the same, then real GDP would
a. stay the same. b. increase by exactly 50 percent. c. increase by exactly 100 percent. d. increase, but not necessarily by either 50 percent or 100 percent.
Explain the differences between the price leadership model and collusive oligopoly.
What will be an ideal response?