Perfect competition means that firms are
A. powerful sellers.
B. price makers (firms set the price of the market).
C. unable to make normal profits.
D. price takers (firms must accept the price of the market).
Answer: D
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Producers were accused of price gouging as the price of bottled water soared after Hurricane Andrew. Consumers clamored for price controls to keep bottled water at pre-Andrew levels. Use supply and demand analysis to graphically show the effect of setting a price ceiling on bottled water after Hurricane Andrew at the pre-hurricane equilibrium price. Use your graph to assist in explaining the likely unintended effects of such a price control. Be sure that your graph is completely and correctly labeled.
What will be an ideal response?
When consumption is rival and excludable, the product is a
A) public good. B) private good. C) mixed good. D) service, not a good.
Which of the following is not a limitation a person faces when shopping for clothes?
a. The amount of time available to shop b. The person's budget c. The various styles that are available d. The selection of stores e. The freedom to make rational choices
Other things constant, an increase in resource prices will do which of the following?
What will be an ideal response?