Which of the following best explains why price in competitive price-taker markets will tend to be driven to the minimum average total cost?

a. homogeneous products.
b. few sellers.
c. firms face downward-sloping demand curves.
d. free entry and exit.


D

Economics

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Governments grant patents to encourage

A) low prices. B) firms to form public enterprises. C) research and development on new products. D) competition.

Economics

The long-run industry supply curve in perfect competition is derived from the

A. short-run industry supply curve which shifts as new firms enter the industry. B. short-run industry supply curve which shifts as old firms exit the industry. C. freedom of firms from sunk costs so that new cost curves become long-run curves. D. All of the reasons listed.

Economics

The Sherman Act outlawed practices that result in the restraint of trade.

Answer the following statement true (T) or false (F)

Economics

Draw a profit/price trade-off curve that results from moving from a competitive to a monopoly industry organization. Show the equilibrium position for the regulator with a political support function (PS curve). What can we say about prices and profits of the regulated industry if it started as a monopoly?

What will be an ideal response?

Economics