What are the requirements for perfect competition?
What will be an ideal response?
The requirements are: many firms selling an identical product; many buyers; no restrictions on entry into the market; established firms have no advantages over new entrants; and sellers and buyers have good information about prices of each firm's product.
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According to Edward Denison's estimates, the largest proportion of economic growth during the 1929-82 period was
a. growth in the labor input. b. growth in output per unit of input. c. growth in the capital input. d. economies of scale. e. education.
Asymmetric information is
A) when a market failure occurs. B) an externality. C) when the producer has information on the product that the consumer lacks. D) the regulatory price for a natural monopoly.
The prisoner's dilemma provides an explanation for
a. the price wars that sometimes occur in oligopolies b. the ability of firms in an oligopoly to extract the entire consumer surplus c. the collusive behavior that sometimes occurs in an oligopoly d. the failure of firms in non-competitive industries to maximize profits e. an irrational behavior that occurs in competitive markets
It is not optimal to have equal incomes.
Answer the following statement true (T) or false (F)