What are four characteristics of pure competition?
What will be an ideal response?
The four are: (1) the presence of a very large number of sellers that act independently in a market; (2) the production and sale of a standardized or homogeneous product; (3) the individual firms are “price takers” in the sense that the seller must accept the going market price for the sale of output; and (4) new firms can easily enter the market and existing firms can easily exit the market.
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The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation, but ________ quality increases. This causes the CPI to ________ the cost of the market basket
A) also; understate B) also; overstate C) not; understate D) not; overstate
Economic growth in the U.S. since 1950 has been characterized by:
A. An average growth rate in real GDP that is slower than the growth rate of the population B. A quadrupling of real GDP from 1950 to 2012 C. An average growth rate in real GDP that is faster than the growth rate of the population D. An average growth rate in real GDP per capita of about 6% per year