The perfectly competitive model makes a lot of fairly unrealistic assumptions. Why do economics textbooks still talk a lot about this model?
A) Many markets are close to being perfectly competitive.
B) It is an important model to use as a benchmark to compare other markets structures to.
C) Perfectly competitive markets maximize societal welfare.
D) All of the above.
D
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Suppose the government borrows to purchase military ammunition which is immediately used up in target practice. The rate of return on this investment is ________, and in this case the government debt ________ a burden on future taxpayers
A) r, is not B) r, is C) 0, is not D) -r, is not E) -r, is
What are stock market margin requirements, and how and why does the Fed control them?
Managers at Concord Construction have determined that the firm’s revenues do not cover the firm’s average variable costs. Which term describes the situation at Concord Construction?
a. The shutdown point b. Allocative inefficiency c. Diseconomies of scale d. The price taking point
An economy is operating with optimum efficiency if
a. the price of the product is greater than marginal cost. b. the production of more of commodity A entails the production of less of commodity B. c. marginal cost of output is greater than marginal utility of output. d. an increase in output would result in a decrease in average cost per unit.