Perfect competition is characterized by
A) many buyers and sellers.
B) a small number of firms.
C) differentiated products of firms in the industry.
D) high barriers to entry.
Answer: A) many buyers and sellers.
You might also like to view...
One major similarity between perfect competition and monopolistic competition is that:
a. the firms earn above normal profits in the long run. b. the firms are price makers. c. the firms produce identical products. d. the firms just break even in the long run. e. entry of firms is barred in the long run.
If the labor supply curve is very elastic, a tax on labor
a. has a large deadweight loss. b. raises enough tax revenue to offset the loss in welfare. c. has a relatively small impact on the number of hours that workers choose to work. d. results in a large tax burden on the firms that hire labor.