In the perfectly competitive market, all firms in the market are assumed to be producing:
a. identical products.
b. differentiated products.
c. products that are heavily advertised.
d. complementary products.
a
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Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts more than the demand curve. As a result
A) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase. B) both the equilibrium price and quantity of MP3 players will decrease. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease. D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.
Studies shows that income elasticity of demand for food is
A) less than 1, but greater than 0. B) more than 1, but less than 2. C) less than 0. D) more than 2.